Cypress, Fairchild post strong Q3 results

BANGALORE, INDIA: Chipmakers Cypress Semiconductor Corp and Fairchild Semiconductor International Inc posted better-than-expected quarterly results, helped by improving demand, strong order rates and lower costs.

Fairchild, which makes power-management and analog microchips, also forecast fourth-quarter revenue above Wall Street expectations. The news follows strong forecasts from chipmakers like Intel Corp, Altera Corp and Xilinx Inc.

For the fourth quarter, Fairchild expects revenue of $333 million to $343 million, while analysts expect $329 million according to Thomson Reuters I/B/E/S.

Fairchild returned to net profitability after three consecutive quarters of losses.

Though Cypress posted a net loss, it returned to profitability on an adjusted basis after posting losses for three quarters in a row.

Cypress, which makes computer hardware like programmable clocks, memory and controllers, posted a loss of $19.7 million, or 13 cents a share, compared with a profit of $138 million, or 86 cents a share, a year ago.

It earned 10 cents a share, excluding items, while analysts were expecting 6 cents a share.

Revenue fell 20 percent to $178.7 million, above analysts' expectations of $174.4 million.

"While we can't predict where the macro economy will go, we are seeing more positive signs of end-market stability and continued low overall supply chain inventories," Cypress Chief Executive T.J. Rodgers said in a statement.

Fairchild, whose competitors include Texas Instruments Inc, On Semiconductor and National Semiconductor Corp, earned $2.7 million, or 2 cents a share, compared with $26.7 million, or 21 cents a share, a year ago.

Excluding items, the company earned 12 cents a share, while analysts were expecting 7 cents a share.

Revenue fell 23 percent to $331.8 million, better than the $321.3 million analysts estimated.

Fairchild said its scheduled backlog for fourth-quarter shipments is currently about $333 million, about $33 million higher than at this point a year ago.

Cypress' operating expenses fell $28.8 million, while Fairchild's operating expenses dropped $13.1 million.

Shares of Cypress closed at $10.28 Wednesday, while those of Fairchild closed at $9.62 on the New York Stock Exchange.