Freescale, the private equity-owned semi company, had $1.01bn sales in Q4, down from $1.14bn in Q3, for operating earnings of $136m and a gross margin of 43.9%. The Q4 net loss was $6m compared to a Q3 loss of $88m.
For 2011 as a whole, Freescale had sales of $4.57bn for a gross margin of margin of 41.4% and operating earnings of $274m The net loss for 2011 was $410m compared to a loss of $1.05bn in 2010.
“We are well positioned with leading products in the most attractive segments of the semiconductor market,” says Rich Beyer, Freescale CEO.
Earlier this week the US federal Reserve released documents from 2006 – the year Freescale was bought by private equity company Blackstone.
Dino Kos, then manager of the US Federal Reserve's System Open Market Account, stated:
"LBOs are no longer being done solely in industries with predictable cash flows," added Kos, "several deals were recently announced in volatile businesses such as semiconductors. The poster child for such deals is Freescale Semiconductor. The company was just acquired for $17.6bn. Cash flow barely covers interest payments, and the margin for error is very small for a company in a notoriously volatile industry."
Kos concluded: "Cynics argue that tomorrow's nonperforming loans are being originated as we speak."
Five years later, at Freescale's IPO last year, Kos was proved right when the valuation then put on the company meant that the PE backers had lost $3bn.