Freescale Semiconductor Inc. recorded a wider loss in the June quarter largely as a result of charges related to non-cash debt elimination charges but its operating loss narrowed sharply on higher sales.

The company reported a net loss of $538 million for the quarter ended July 2 compared with a net loss of $484 million in the second quarter of 2009 and $257 million in the first quarter of this year. In the recently ended quarter, Freescale recorded a non-cash charge of $361 million related to the elimination of $1.4 billion in long-term debt. The year-ago results included net gain of $21 million related to debt financing.

The company¡¯s overall financial performance improved during the quarter with sales jumping 35 percent year-over-year to $1.1 billion from $824 million in the 2009 second quarter and up 9 percent from $1 billion in the first quarter.

Freescale narrowed operating loss to $18 million from $345 million in the comparable year-ago quarter and $61 million in the immediately preceding quarter.

¡°Second quarter results showed continued growth in revenues and profitability for Freescale,¡± said Rich Beyer, chairman and CEO of the company in a statement. ¡°We are on a solid trajectory with four quarters of sequential growth, and our design win momentum continues to solidify our leadership in embedded processing solutions.

¡± Freescale¡¯s microcontroller division, the company¡¯s biggest operating unit on a revenue basis, reported net sales of $387 million for the quarter up from $374 million in the prior quarter and $240 million in the second quarter of 2009.

Sales of networking and multimedia products rose to $303 million, up 40 percent from $216 million in the comparable quarter of 2009, while RF, analog and sensor sales increased to $254 million from $201 million.

The company said its cellular business had sales of $133 million in the quarter, down from $138 million in the year-ago quarter. The company has decided to exit the cellular IC business. Freescale¡¯s gross profit margin improved to 37.5 percent in the second quarter, up from36.2 percent in the prior quarter and 23.4 percent in the year-ago quarter