Why Freescale Semiconductor Dropped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Freescale Semiconductor (NYS: FSL) dropped by as much as 14% today after the company reported earnings and guidance fell short.
So what: Revenue added up to $1.03 billion, resulting in adjusted earnings per share of $0.07. That top-line figure was right on target, while the bottom line beat the Street's best guesses of $0.05 per share. The real culprit was in the company's third-quarter guidance.
Now what: Third-quarter sales are predicted to range from $955 million to just over $1 billion, which is below expectations. Additionally, gross margin is expected to decrease by roughly 75 basis points sequentially. Freshly minted CEO Gregg Lowe continues to work on reducing costs to get back in the black, and will be conducting a strategic review over the following weeks.
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The article Why Freescale Semiconductor Dropped originally appeared on Fool.com.Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.