Freescale Semiconductor, Ltd. announced financial results for the second quarter ended July 4, 2014, including net sales for the second quarter of 2014 of $1.19 billion, compared to $1.13 billion in the first quarter of 2014 and $1.04 billion in the second quarter of 2013. Operating earnings for the period were $180 million, compared to $155 million in the first quarter of 2014 and $125 million in the second quarter of 2013. Operating earnings improved on a sequential and year-over-year basis due to higher sales and improving gross margins, partially offset by increased investments in new products and higher incentive compensation.
Net earnings for the second quarter were $86 million, or $0.28 per share, compared to a net loss of $23 million, or $0.08 per share, in the first quarter of 2014 and a net loss of $65 million, or $0.25 per share in the second quarter of 2013.
“Revenues, gross margins and earnings per share all showed solid improvement, both sequentially and year over year,†said Gregg Lowe, president and CEO. “All five product groups contributed to the growth, which is driving consistent gains in market share.â€
Adjusted operating earnings for the three months ended July 4, 2014 were $208 million compared to earnings of $186 million in the first quarter of 2014 and $151 million in the second quarter of 2013. For the third quarter of 2014, the company expects: Net sales to be between $1.19 billion and $1.23 billion; and Gross margins to increase approximately 50 basis points on a sequential basis.
The company’s net sales figures for the second quarter of 2014 were as follows: Microcontroller net sales were $246 million, compared to $223 million in the first quarter of 2014 and $199 million in the second quarter of last year. On a year-over-year basis, Microcontroller revenues benefited from increased sales into distribution and higher sales of applications processors into the automotive market.
Digital Networking net sales were $291 million, compared to $249 million in the first quarter of 2014 and $229 million in the second quarter of last year. Networking sales growth was broad-based across service provider, including wireless base stations in China, enterprise and the general embedded segments.
Automotive Microcontroller net sales were $308 million, compared to $304 million in the first quarter of 2014 and $272 million in the second quarter of last year. Automotive Microcontroller sales benefited from growth in all key geographies and in distribution due to growth in vehicle semiconductor content and higher worldwide automotive production.
Analogue and Sensors net sales were $205 million, compared to $198 million in the first quarter of 2014 and $188 million in the second quarter of last year. analogue and Sensors sales benefited on a sequential and year-over-year basis from increased vehicle semiconductor content and growth in worldwide automotive production.
RF net sales, which include sales of power amplifiers to the wireless infrastructure market, were $120 million, compared to $113 million in the first quarter of 2014 and $81 million in the second quarter of last year. On a sequential and year-over-year basis, RF sales increased due to increased spending on 3G and 4G wireless networks, particularly in China.
Other net sales were $21 million, compared to $40 million in the first quarter of 2014 and $69 million in the second quarter of last year. Sequentially, revenues declined primarily due to lower intellectual property revenue. On a year-over-year basis, intellectual property revenues declined and we experienced lower sales into the wireless handset market, consistent with the company’s prior decision to exit that market.
