Corrects to show net income instead of net loss for the prior quarter (first quarter) as reported earlier in the second paragraph. The corrected version follows:
Chipmaker National Semiconductor Corp. (NSM) said Thursday after the markets closed that its second quarter profit rose 30% from last year, when results were weighed down by a hefty restructuring charge. The company's quarterly earnigs per share also came in above analysts' estimate as did its quarterly sales. At the same time, the company forecast third quarter sales to be roughly flat sequentially.
The Santa Clara, California-based company reported net income for the second quarter of $47.0 million or $0.20 per share, compared to $36.3 million or $0.16 per share for the year-ago quarter and $29.8 million or $0.13 per share for the prior quarter.
The year-ago quarter results included a pre-tax $28.1 million restructuring charge.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.14 per share for the second quarter. Analysts' estimates typically exclude special items.
Gross margin for the second quarter was 65.3%, down from 65.8% in the second quarter of last year but up from 61.1% in the first quarter. The company attributed the sequential improvement in gross margin to a combination of a stronger product mix, higher sales volume and improved manufacturing cost performance, including some earlier-than-expected savings realized from wafer fab consolidation.
Net sales for the second quarter fell 18% to $344.6 million from $421.6 million in the same quarter last year. Second quarter net sales rose 10% sequentially. Nineteen analysts had a consensus revenue estimate of $336.69 million for the second quarter.
The company noted that the sequential sales growth was driven mainly by increased demand in industrial markets, which are primarily served through distributors.
National said its total bookings in the second quarter increased 17% sequentially due mainly to higher order rates from distributors serving industrial markets in every major region. Total company bookings exceeded billings in the second quarter.
"New order rates for our analog products continued to improve each month through the second quarter, giving us a higher opening backlog for the new quarter," said Don Macleod, National's new chief executive officer. "Now that we have restored our gross margins back over the 65-percent threshold, we can put even more of our focus on revenue growth going forward."
For the first six months of its fiscal year, the company reported net income of $76.8 million or $0.32 per share, compared to $115.9 million or $0.49 per share for the same period last year.
Net sales for the first-half fell to $659.0 million from $887.2 million in the prior year quarter.
The company also declared a cash dividend of $0.08 per share, payable on January 11 to shareholders of record on December 21.
National got a new chief executive officer recently. Brian Halla retired as CEO on November 30. Donald Macleod, who was chief operating officer of the company, succeeded Halla. Halla, who remains as executive chairman of the company, plans to retire from the board at the end of the 2010 fiscal year on May 30.
Looking forward, the company said it expects third quarter sales to be roughly flat sequentially, although the typical seasonal pattern is for third quarter sales to decline sequentially. Analysts currently expect the company post revenue of $331.18 million for the third quarter.
The sequential improvement in National's first quarter sales and gross margin as well as its upbeat sales outlook for the current quarter indicate that there is an improvement in global demand for semiconductors.
Many chip companies have been raising estimates for the current quarter, citing an improved demand pattern.
Texas Instruments Inc. (TXN), the world's biggest maker of analog chips, on Tuesday raised its fourth-quarter earnings outlook to a range of $0.47 to $0.51 per share from the prior range of $0.42 to $0.50 per share. The company expects fourth-quarter revenue to be $2.90 billion to $3.02 billion, compared to its previous expectation of $2.78 billion to $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.
Also on Tuesday, Xilinx, Inc. (XLNX) 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.
National shares, which have traded in a range of $9.06 to $16.20 over the past year, closed Thursday's regular trading session at $15.28, down 22 cents or 1.429% and lost an additional 34 cents or 2.23% in after hours trading.
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