Micro Linear unloads three divisions

2 min read

Micro Linear announced after the bell Thursday that it sold off three of its product lines to Fairchild Semiconductor for $10 million in cash.

The chipmaker unloaded its power management, bus interface and video product lines, three divisions that accounted for about 65 percent of its total sales in the first half of the year.

Company officials said the move will help it to focus on developing new product lines geared toward expanding the data communication and wireless product lines that it retains after the transaction.

Micro Linear (Nasdaq: MLIN) shares closed up 1/8 to 5 1/2 ahead of the news.

"These products do not fit our strategy as a fabless semiconductor company and we felt it important to find an acquirer that could support the ongoing needs of our growing customer base," said CEO David Gellatly in a prepared release. "After divesting these product lines, we will have substantially completed the restructuring of the company and are now able to focus our efforts on developing the complete silicon solutions…"

Fairchild Semiconductor (NYSE: FCS) shares closed off 1 7/8 to 38 3/8 Wednesday.

In its latest quarter, Micro Linear posted a profit of $379,000, or 3 cents a share, excluding an $8.1 million charge related to a legal settlement.

First Call Corp. consensus expects it to earn 7 cents a share in its third quarter and 24 cents a share in the fiscal year.

The stock moved as high as 12 3/8 in January after falling to a low of 4 1/8 in October.

The lone analyst following the stock rates it a "hold."