Fairchild Semiconductor International Inc. said Wednesday it is lowering its outlook for the third quarter and embarking on a cost-cutting program as it struggles with weak demand. The company said it now expects third-quarter sales of about $340 million, down from a prior range of $355 million to $375 million. The current FactSet consensus is for third-quarter sales of $365 million. The company is expecting its gross margin to be within its previous range of 34% to 35%. Fairchild said it is planning to cut annual operating costs by $30 million to $34 million in a program that will be implemented by the middle of the fourth quarter. The company is expecting to book a charge of about $13 million for severance in the third quarter. "Given the incrementally weaker demand environment, we are taking decisive steps to reduce operating expenses to our target model of 25 percent of sales at the current revenue level," Chief Executive Mark Thompson said in a statement. Shares were not yet active in premarket trade, but are down about 17% in the year so far, while the S&P 500 has lost 4.4%.
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