Freescale’s Q2 sales were up 10% y-o-y to $1.2bn and gross margin was 42.3% compared to 37.5% in Q2 2010.
The figures would have been better were it not for the effect of the Japanese earthquake on the automotive industry which had to decrease production due to lack of components.
Freescale makes a third of its revenues from the automotive sector.
Interestingly, Freescale CEO Rich Beyer said that one effect of the earthquake is for OEMs to hold more inventory against the risk of future supply chain disruptions.
"There has been a build-up of inventory at some customers and distributors,” Beyer told the Wall Street Journal.
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Freescale’s Q2 sales of microcontrollers were up 11% y-o-y, networking and multimedia sales grew 3%, RF, analogue and sensor sales rose 24% to $315m, and cellular sales sank 8.3%.
If it were not for the debt interest payments loaded onto the company by its private equity owner Blackstone, Freescale would be profitable.
As it is, the net loss on Q2 was $168m compared with a loss of $538m in Q2 2011.
When Blackstone bought Freescale in 2006, it loaded $9.6bn of debt onto the company on which the interest payments were $750m a year.
That debt has been reduced to $7bn by bond-buy-backs and the interest payment is now running at $500m a year.
Also contributing to Freescale’s net loss for Q2 2011 were expenses related to its recent IPO which raised $783m to pay down debt, and to charges for closing down a fab in Japan.
Freescale expects a flat Q3 for sales.