National Semiconductor Corp. (NSM) is scheduled to announce second-quarter results for fiscal 2010 after the market closes Thursday. The semiconductor company is focused on analog and mixed-signal integrated circuits and sub-systems, particularly in the area of power management. The company has a diversified product portfolio, including power management circuits, audio and operational amplifiers, communication interface products and data conversion solutions. For the fiscal year ended May 31, 2009, the company generated about 91% of its revenue from Analog segment products.
For the first quarter ended August 30, the company reported a 63% plunge in earnings, as sales dropped and margins deteriorated in a difficult industry environment. The company's first-quarter net income dropped to $29.8 million or $0.13 per share from $79.6 million or $0.33 per share for the year-ago quarter. The results in fiscal 2010 included about $6 million in pre-tax restructuring charges related to the phased closure of the company's manufacturing facilities in Arlington, Texas and Suzhou, China.
National Semi's net sales for the first quarter dropped 32% to $314.4 million from $465.6 million in the same quarter last year. However, net sales showed a 12% sequential growth, driven by higher demand for the company's energy-efficient analog products, especially from distributors serving broad industrial markets. The company's total bookings in the first quarter increased by about 17% sequentially due to higher order rates in North America, Europe and Japan.
In the second quarter of fiscal 2009, the company earned $34 million or $0.14 per share, and generated $422 million in sales. The results included about $28 million of pre-tax severance and restructuring expenses and about $7 million of discrete income tax expenses.
When the company releases results later in the day, on average, 21 analysts polled by Thomson Reuters expect the company to earn $0.14 per share for the quarter with estimates ranging between $0.09 per share and $0.17 per share. Revenues are estimated to be $336.03 million. Analysts' estimates typically exclude special items.
While releasing the first-quarter results in September, the Santa Clara, California-based company said it expects second quarter sales to increase about 3% to 8% sequentially to between $325 million and $340 million.
In fact, indications of an economic recovery has prompted many technology companies to raise their forecasts. Tuesday, chip maker Texas Instruments In. (TXN) raised its fourth-quarter earnings outlook to a range of $0.47-$0.51 per share from the prior range of $0.42-$0.50 per share. The company expects fourth-quarter revenue to be $2.90 billion-$3.02 billion, compared to its previous expectation of $2.78 billion-$3.02 billion. Texas Instruments witnessed robust bookings and shipments due to stronger-than-expected end demand across geographies, including improvements in Europe and in industrial and automotive shipments.
Xilinx, Inc. (XLNX ) Tuesday raised its third-quarter sales and gross margin outlook, citing broad-based strength across all end market categories and geographies. Programmable Chip maker Altera Corp. (ALTR) late last month raised its fourth quarter sales forecast.
Analog Devices Inc. (ADI), another chip maker, said late last month that its fourth-quarter profit declined 27% from last year, hurt by shrinking margins, and lower demand for its products. However, the company issued fourth-quarter earnings outlook that exceeded Street estimates.
Credit Suisse in a client note Wednesday said that it expects upside to National Semi's second-quarter results and third-quarter outlook, driven by an industrials pickup, partially offset by inventory adjustments at Korean handset vendors. However, the brokerage remains concerned that Texas Instruments's efforts to gain share in analog will pressure mid-tier analog companies, with National Semi particularly vulnerable, given Texas Instruments's focus on wireless analog, which is one-third of National Semi's revenues.
Among events during the quarter, the company's chief executive officer Brian Halla retired from his post on November 30. Halla continues to remain the executive chairman of the company. Donald Macleod, who was chief operating officer of the company, succeeded Halla.
NSM closed Wednesday's regular trade at $15.50, up $0.33 or 2.18%, on 7.09 million shares. In the extended trade, the stock dropped over 2% and was trading at $15.17. For the past year, the stock traded in the range of $9.06-$16.20.
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