Freescale Surges as Sales Forecast Tops Analysts’ Estimates

Freescale Semiconductor Ltd. (FSL), the chipmaker mostly owned by a private-equity group that includes Blackstone Group LP (BX) and TPG Capital, surged the most in more than a year after its sales forecast beat estimates.

Freescale advanced 15 percent to $14.23 at the close in New York, the biggest gain since August 2011. The stock has declined 11 percent in the past 12 months, compared with a 12 percent rise the Nasdaq Composite Index.

First-quarter revenue will be $945 million to $985 million the, Austin Texas-based company said yesterday in a statement. Analysts had projected sales of $931.1 million on average, according to data compiled by Bloomberg.

Freescale is forecasting improving demand for chips that are used in mobile phone systems, particularly in China. The company expects better orders from automakers for microcontrollers, as they add more functionality to their products, Chief Financial Officer Alan Campbell said yesterday on a conference call.

The company had a net loss in the fourth quarter of $35 million, or 14 cents a share, compared with a loss of $6 million, or 2 cents, in the same period a year earlier. The fourth-quarter loss excluding some items was 15 cents a share, less than the average 17-cent loss projected by analysts.

Freescale’s earnings are weighed down by the burden of paying debt taken on when it was first take private by the private equity consortium.

Sales in the quarter were $957 million, exceeding the average $940.4 million estimate.

Like Texas Instruments Inc. (TXN), Freescale makes analog chips that are used in everything from space hardware to household electronics, making its sales an indicator of demand across the economy.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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