Chipmaker National Semiconductor Corp. (NSM) said Thursday after the markets closed that its third quarter profit more than doubled from last year, helped by higher sales and improved gross margins. The company's quarterly earnings per share came in above analysts' expectations as did its quarterly sales. At the same time, the company forecast fourth quarter sales above analysts' current consensus estimate.
The Santa Clara, California-based company reported net income for the third quarter of $53.2 million or $0.22 per share, compared to $21.1 million or $0.09 per share for the year-ago quarter and $47.0 million or $0.20 per share for the previous sequential quarter.
The latest quarter results included a pre-tax $6.4 million restructuring charge, while the year-ago quarter results included about $11 million of discrete income tax benefits.
On average, 22 analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the third quarter. Analysts' estimates typically exclude special items.
Gross margin for the third quarter increased to 67.3% from 57.5% in the third quarter of last year and 65.3% in the second quarter, driven by stronger product mix from higher sales into industrial markets as well as continued improvement in the company's manufacturing cost performance.
Net sales for the third quarter rose 24% to $361.9 million from $292.4 million in the same quarter last year. Third quarter net sales grew 5% sequentially. Nineteen analysts had a consensus revenue estimate of $348.58 million for the third quarter.
The company noted that the sales growth was driven mainly by stronger demand for its analog products in industrial markets, which are primarily served through distributors. Sales to wireless handset customers were down seasonally following the holidays, it added.
Don Macleod, National's president and chief executive officer, said, "Our sequential and year-on-year revenue growth demonstrates top-line improvement, driven by both our core analog business and traction in several new emerging areas."
National said its total bookings in the third quarter increased 5% sequentially, as order rates increased from direct OEM customers as well as from distributors. Total company bookings exceeded billings in the third quarter.
For the first nine months of its fiscal year, the company reported net income of $130.0 million or $0.54 per share, compared to $137.0 million or $0.58 per share for the same period last year.
Net sales for the nine-month period fell to $1.02 billion from $1.18 billion in the prior year period.
The company also declared a cash dividend of $0.08 per share, payable on April 12 to shareholders of record on March 22.
Looking forward, National forecast fourth quarter net sales of $375 million to $390 million, which represents a sequential growth of about 4% to 8%. Analysts currently expect the company to post revenue of $360.89 million for the fourth quarter.
National's upbeat outlook comes three days after Texas Instruments Inc. (TXN) raised the low end of its first quarter revenue and earnings guidance. the Dallas, Texas-based said it now expects first quarter revenue to be in the range of $3.07 billion to $3.19 billion, compared to its the prior guidance of $2.95 billion to $3.19 billion. The world's second biggest maker of mobile phone chips also said it now expects first quarter earnings to be $0.48 to $0.52 per share, compared to its previous guidance of $0.44 to $0.52 per share.
National shares, which have traded in a range of $9.30 to $16.20 over the past year, closed Thursday's regular trading session at $14.34, down 49 cents or 3.30% but gained 33 cents or 2.30% in after hours trading.
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