Question-and-Answer Session
Operator
(Operator instructions). Our first question today is from Craig Ellis. You may ask your question and please state your company name.
Craig Ellis - Caris & Company
Caris & Company. Bill can you clarify the one-time benefits that you mentioned in the gross margin line in the quarter?
Bill Bock
Sure Craig. We had some accounting adjustments in the quarter that helped boost margins above the 64% level. That is why my guidance for the fourth quarter and looking forward is in the 63% to 64% range.
Craig Ellis - Caris & Company
Okay, great. And then as we think about the target margin model of the company Bill, how would you guide us to think about that, given the margins that you are currently achieving on the growth and the operating line.
Bill Bock
I think that we are at the moment just very pleased and proud of the performance of the business, you know we are above our model on gross margin by 2 to 3 percentage points. We are also above our target on operating income by a full 5 percentage points in this quarter. I think we will continue to enjoy above model performance in the fourth quarter and we are in the process of developing our plan for 2010 which also looks quite strong to us right now.
I think that we will retain our business model as a multi-year target for the company as we move into 2010. So we have no plans to make a formal change but we are certainly pleased with the fact that we are out performing today.
Craig Ellis - Caris & Company
Excellent and then if I could follow up with Necip on the product question. Necip, it did sound like you are getting increased customer diversity on the FM tuner side of the business, can you talk a little bit about the way the OEM balance could shake out as you look at design wins now for and what that could mean in 2010.
Necip Sayiner
Certainly, we continue to get design wins with large handset customers and consumer audio customers but we are also winning designs across the board particularly with ODMs in greater china with our AM/FM products. We have become the product of choice in that region for a variety of end products including AM/FM as well as some home theater system wins with household names, large OEMs in Japan and Korea.
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