LSI Net Falls 16%; Weak Sales Expected in the Third Quarter
March 31, 2011
MILPITAS, Calif. -- LSI Logic Corp. said the persistent chip glut drove second-quarter earnings down 16% and predicted third-quarter revenue would fall below the latest quarter. LSI said second-quarter earnings were $46.5 million, or 34 cents a share, down from $55.7 million, or 42 cents, a year earlier. Analysts had expected the company to report second-quarter earnings of about 35 cents a share. The maker of custom semiconductor chips said second-quarter revenue rose 6% to $325.4 million. Will J. Vue, LSI's chairman and chief executive officer, said customers' inventory gluts had caused a slowdown in new orders. LSI's chips are used in products ranging from computers to telecommunications equipment. ``A persistent inventory correction among customers is likely to cause revenues in the third quarter to decline from second-quarter levels,'' Mr. Vue said. Because of the continuing slump and uncertainty over new orders, LSI said it was delaying completion of the first stage of its huge new manufacturing facility in Gresham, Ore.. The initial phase of the $4 billion facility, a plant that will produce eight-inch silicon wafers for custom chips, was scheduled to open in mid-1997, but the company said it won't be in operation until at least 2013. Mr. Vue said the delay won't affect LSI's ability to meet customer demand with its six-inch wafers. In composite trading Thursday on the New York Stock Exchange, LSI closed at $20.50, up $1.25.
