SA Transcripts • Tue, Jan. 27
- Executing well in the absence of any major cyclical upturn.
- Revenues, margins and cash flows are improving, while leading indicators suggest that the current trend can continue.
- Stock offers 30-40% upside as earnings and execution help close the valuation gap with peers.
Freescale Semiconductor: Boosting With Tailwind Opportunities
Moody's May Download Freescale but Who Really Cares?Saul Sterman • Sep. 19, 2006
Tue, Jan. 27, 5:20 PM
- In addition to beating Q4 EPS estimates (while posting in-line revenue), Freescale (NYSE:FSL) is guiding for Q1 revenue of $1.135B-$1.185B, above a $1.11B consensus.
- Driving the EPS beat: Q4 gross margin was 47.2%, up 90 bps Q/Q and 330 bps Y/Y, and soundly beating guidance for a 75-100 bps Q/Q drop. GM is expected to be roughly flat Q/Q in Q1.
- RF chip sales (lifted by Chinese 4G base station demand) were a standout in Q4, rising 71% to $164M. Microcontroller sales +5% Y/Y to $232M. Digital networking -11% to $217M (carrier and industrial weakness). Automotive MCUs +1% to $271M. Analog/sensors +2% to $193M.
- Operating expenses rose 4% to $327M. $74M was spent on capex in Q4, and $249M over the whole of 2014.
- Shares have risen to $29.50 AH, making new 52-week highs along the way.
- Q4 results, PR
Tue, Jan. 27, 4:07 PM| Comment!
Mon, Jan. 26, 5:35 PM
Nov. 26, 2014, 2:52 PM
- Chip stocks are outperforming after Analog Devices (ADI +5.2%) beat FQ4 estimates and offered in-line FQ1 guidance. The Philadelphia Semi Index (SOXX +1.9%) has made new highs.
- Notable gainers include many analog/mixed-signal and telecom IC firms: TXN +3%. LLTC +2.7%. SMTC +3.1%. ISIL +3.3%. SWKS +3.7%. AVGO +2.9%. OVTI +3.2%. FSL +3.1%. EZCH +2.5%. XLNX +2.3%. ALTR +2.1%. MX +4.3%. PMCS +2.7%. BRCM +2%.
- On its CC (transcript), ADI noted its telecom equipment chip sales are holding up well in spite of weak capex, aided by the fact its dollar content for 4G base stations is "at least 20% to 30% better" than for 3G base stations. The company also mentioned its lead times were stable in FQ4.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 31, 2014, 11:31 AM
- Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
- Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
- On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
- Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
- Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%. ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
- Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Oct. 24, 2014, 2:31 PM
- Down AH yesterday due to the light Q4 guidance offered with a Q3 EPS beat, Freescale (NYSE:FSL) has reversed course. Some bullish sell-side notes are helping.
- Credit Suisse's Jonathan Pitzer likes the face Freescale's gross margin rose 110 bps Q/Q in Q3 (better than guidance for a 50 bps drop), and that op. margin reached a record high of 18.7% thanks to a 3.5% Q/Q opex drop. " This should alleviate investor concerns relative to margin drivers that often seemed ambiguous."
- Deutsche's Ross Seymore: "Despite near term revenue headwind, we continue to view FSL as a company that is righting the ship on revenue, focusing on gross margin progression and opex discipline, which should result in better free cash flow to further de-lever the balance sheet and unlock earnings power."
- Oppenheimer's Rick Schafer is more cautious, calling Chinese 4G infrastructure demand "the lone bright spot" for the chipmaker's sales as it deals with auto/industrial softness.
Oct. 23, 2014, 6:25 PM
- Though it posted in-line Q3 revenue and beat EPS estimates, Freescale (NYSE:FSL) is guiding for Q4 revenue of $1.075B-$1.125B, below a $1.18B consensus. In addition, gross margin is expected to drop 75-100 bps from a Q3 level of 46.3%.
- Freescale was among the names clocked earlier this month by fellow microcontroller vendor Microchip's warning.
- Q3 results, PR
Oct. 23, 2014, 4:20 PM| Comment!
Oct. 22, 2014, 5:35 PM
- ADES, ALGN, ALTR, AMZN, BAS, BJRI, BLDR, BMRN, CB, CBI, CERN, CLMS, CLNE, CNMD, CPWR, CTCT, CYN, DECK, DLB, DV, ECHO, ELY, EW, FET, FII, FLS, FSL, GHL, GIMO, HBHC, HUBG, HWAY, IM, INFA, JNPR, KLAC, LOGM, LSCC, MSFT, MTSN, MXIM, MXWL, N, NCR, NTGR, OLN, P, PACB, PCCC, PDFS, PEB, PFG, PFPT, POL, QLIK, RMD, RUBI, RVBD, SHOR, SIVB, SPNC, SRCL, SWFT, SWN, SYNA, VMI, VRSN, WOOF, WRB, WRE, WRI
Jul. 25, 2014, 6:19 PM
- Freescale (FSL -9.6%) beat Q2 estimates and issued decent Q3 guidance: Revenue of $1.19B-$1.23B vs. a $1.2B consensus. But the company also disclosed its high-margin IP licensing business saw a major Q/Q revenue drop, and stated on its CC (transcript) it expects IP revenue to "remain at the low levels we saw this quarter over the next several quarters."
- Freescale's Other revenue, which consists of IP licensing and some mobile chips, fell 48% Q/Q and 69% Y/Y to $21M. That led the company's gross margin to come in at 45.2%, +40 bps Q/Q and +270 bps Y/Y, but below guidance for 50-75 bps growth. GM is expected to rise 50 bps Q/Q in Q3.
- Freescale estimates the Q/Q IP decline had a 140 bps impact on GM. It attributes the weakness to "challenges inherent in completing [licensing] deals in the current environment."
- Other parts of Freescale's business are faring much better: Core microcontroller sales +24% Y/Y to $246M; automotive microcontrollers +13% to $308M; digital networking (network processors) +27% to $291M with the help of 4G base station growth; analog/sensors +9% to $205M.
- Q2 results, PR
Jul. 24, 2014, 4:25 PM| Comment!
Jul. 23, 2014, 5:35 PM
- ABAX, ACTG, ALGN, ALTR, AMZN, ATRC, AWAY, BAS, BCOV, BCR, BIDU, BJRI, BLDR, CB, CBI, CERN, CLS, COLM, CTCT, CYN, DECK, DGII, DLB, DTLK, ECHO, ELY, EPR, FET, FICO, FII, FLEX, FSL, GIMO, HBHC, IM, INFA, KLAC, LEG, LOGM, LSCC, MITK, MKTO, MLNX, MSCC, MTD, MTSN, MXIM, N, NR, NTGR, OLN, P, PACB, PEB, PFG, PFPT, QLGC, QLIK, RFMD, RGA, RGC, RSG, RVBD, SBAC, SBUX, SIVB, SPNC, SRCL, SWFT, SWI, SYA, TPX, TSRO, UHS, V, VR, VRSN, WOOF, WRE, WRI
Jul. 23, 2014, 12:25 PM
- Among the year's best tech performers, chip stocks are selling off (SOXX -1.8%) on an up day for the Nasdaq following weak numbers from FPGA giant Xilinx (XLNX -14.5%).
- Xilinx missed FQ1 revenue estimates by over $18M, and also guided for FQ2 revenue to be well below consensus. The company blamed the FQ1 shortfall on soft defense and wireless sales. BMO and BofA/Merrill have downgraded Xilinx; the former thinks Xilinx's 28nm share might be peaking.
- Xilinx stated on its CC (transcript) the wireless weakness was mostly due to soft 28nm chip sales to Chinese 4G base station vendors; Chinese 4G rollouts have long been viewed as a catalyst for both Xilinx and Altera (ALTR -4.7%). Aerospace/defense sales were hurt by program timing issues.
- Meanwhile, switch/router vendor Juniper offered light Q3 guidance to go with a Q2 beat. The company noted on its CC (transcript) "market dynamics" for U.S. carriers, including M&A activity, are affecting project rollouts.
- Also: Analog/mixed-signal IC vendor Linear (LLTC -4.1%) is selling off in spite of beating FQ4 estimates and guiding in-line (8%-11% Y/Y FQ1 rev. growth vs. 9.1% consensus).
- Notable decliners: FSL -5.3%. IDTI -6.4%. EZCH -3.3%. PMCS -4.3%. LSCC -6.8%. CAVM -4.7%. SMTC -4.1%. ATML -3.2%. TQNT -3.1%. RFMD -2.9%. IRF -2.9%.
- Qualcomm, NXP, TriQuint, and Cirrus Logic report after the bell.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Apr. 24, 2014, 7:04 PM
- Freescale (FSL) has hired Dan Durn, formerly the CFO of #2 chip foundry Globalfoundries, to be its new CFO, starting in June. Durn will replace Alan Campbell, who announced plans to retire in January.
- The chipmaker has guided in its Q1 report for Q2 revenue of $1.14B-$1.2B, above a $1.13B consensus. Gross margin is expected to rise 50-75 bps from a Q1 level of 44.8%.
- FSL -1.7% AH in spite of the guidance and a Q1 beat. Shares went into earnings trading within a hair's breadth of their 52-week high of $26.
- Q1 results, PR
Apr. 24, 2014, 4:18 PM| Comment!
Apr. 24, 2014, 12:10 AM
- ABAX, AFOP, ALTR, AMCC, AMZN, AWAY, BAS, BGG, BIDU, BLDR, BRCM, CAMP, CB, CENX, CERN, CINF, CLF, CLMS, CRUS, CUDA, CYN, DECK, DGII, DV, ECHO, EMN, EW, FBP, FET, FICO, FII, FSL, GIMO, HBI, HWAY, INAP, INFA, ITRI, KLAC, LEG, LSCC, LVS, MAS, MKTO, MLNX, MSCC, MSFT, MTSN, MXIM, NEM, NR, NTGR, OLN, OTEX, P, PEB, PFG, PKI, QLIK, RGA, RGC, RSG, SBUX, SHOR, SIVB, SPN, SPWR, SRCL, SWFT, SYNA, TCO, UHS, V, VR, VRSN, WFT, WOOF, WRE, WRI
FSL vs. ETF Alternatives
Freescale Semiconductor Ltd offers embedded processors such as microcontrollers and digital networking processors. It has five operating segments: Microcontrollers, Digital Networking, Automotive Microcontrollers, Analog and Sensors, and Radio Frequency.
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