Chipmaker National Semiconductor Corp. (NSM) said Thursday after the markets closed that its first quarter profit nearly tripled from last year, helped by higher sales and improved margins. The company's quarterly earnings per share also came in above analysts' expectations. However, the company forecast second quarter sales below analysts' current consensus estimate.
The Santa Clara, California-based company reported net income for the first quarter of $88.8 million or $0.36 per share, compared to $29.8 million or $0.13 per share for the year-ago quarter.
The latest quarter results include a $9.8 million pre-tax restructuring charge related to process transfers and shutdown activity for a previously announced manufacturing consolidation.
On average, 21 analysts polled by Thomson Reuters expected the company to earn $0.35 per share for the first quarter. Analysts' estimates typically exclude special items.
Gross margin for the first quarter increased to 70.9% from 61.1% in the prior year quarter, driven by manufacturing cost efficiencies from higher capacity utilization and benefits from manufacturing consolidation completed in the previous quarter.
Net sales for the first quarter rose 31% to $412.0 million from $314.4 million in the same quarter last year. First quarter net sales grew 3.4% sequentially due mainly to demand from wireless handset and industrial markets. Nineteen analysts had a consensus revenue estimate of $414.49 million for the first quarter.
National said its total bookings in the first quarter fell 10% sequentially, mainly from the company's distribution channel. However, order rates improved slightly in the quarter for analog and power management products for the personal mobile device and communications infrastructure markets, the company noted.
Looking forward, National forecast second quarter net sales of $390 million to $415 million, which represents flat to a decline of 5% as compared to the first quarter. Analysts currently expect the company to post revenue of $418.64 million for the second quarter.
Don Macleod, National's chairman and chief executive officer, said, "In the near term, slower growth in our end markets and distribution channel, along with some likely inventory reduction, will mute the seasonal growth that we would normally see in our business during this time of the year."
Shortly after the release of National's results, Texas Instruments Inc. (TXN) came out with its mid-quarter update. The Dallas, Texas-based chipmaker narrowed its revenue and earnings forecast for the third quarter, with mid-points of the forecast ranges remaining unchanged.
Texas Instruments said it now expects revenue of $3.62 billion to $3.78 billion and earnings of $0.66 to $0.72 per share for the third quarter. Previously, the company expected revenue of $3.55 billion to $3.85 billion and earnings of $0.64 to $0.74 per share. Analysts currently expect the company to earn $0.69 per share on revenue of $3.69 billion for the third quarter.
National shares, which have traded in a range of $12.41 to $16.09 over the past year, closed Thursday's regular trading session at $12.90, up a penny. The stock is currently losing 64 cents or 4.96% in after hours trading.
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