SAN FRANCISCO—Fairchild Semiconductor Thursday (April 16) reported a net loss of $51.1 million on revenue of $223.3 million for the first quarter. But the company's top executive said orders improved toward the end of the quarter and in the first weeks of the second quarter.
"Our first quarter sales were well below customer consumption levels as the industry worked through the current inventory correction," said Mark Thompson, Fairchild's president and CEO, in a statement. "The reduction in sales was broad-based across all end markets. However, order rates improved during the quarter and in the first weeks of Q2, enabling us to increase backlog."
First quarter revenue was down 30 percent compared with the prior quarter and 45 percent compared with the same period of 2008, Fairchild (San Jose, Calif.) said.
The quarterly loss was lower than the $218.1 million loss the company reported for the fourth quarter of 2008, but higher than the net loss of $17.1 million Fairchild posted in the first quarter of 2008, Fairchild said. The loss included a $6.7 million charge for restructuring and impairments, the company said.
Last month, Fairchild said it would close two fabs and eliminate at least 200 jobs in an effort to cut costs.
Thompson said the company reduced inventory in its distribution channel and reduced costs across the company. Fairchild believes the structural changes made in the last two quarters will enable the company to maintain its current level of lower operating expenses going forward, he said.
"The manufacturing restructuring actions announced late last month are also expected to drive solid gross margin improvements over time," Thompson said.
On an adjusted basis, excluding charges, Fairchild reported a first quarter loss of $40.1 million.
First quarter gross margin was 15.2 percent, down 11 percentage points sequentially and 15 percentage points lower than in the first quarter of 2008, Fairchild said.
Thompson said Fairchild's overall first quarter product pricing was down about 2 percent sequentially, slightly less favorable than prior quarters.
Mark Frey, Fairchild's executive vice president and chief financial officer, said the company is not providing second quarter guidance given limited visibility. But the company's order backlog is increasing, Frey said, and, assuming Fairchild continues to record positive backlog fill "we believe sales in the range of $250 to $270 million are possible for the second quarter."
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