National Semiconductor Posts A Loss for Fiscal First Quarter
May 18, 2011
Chip maker National Semiconductor Corp. announced disappointing results for its fiscal first quarter on a 19% drop in sales, but said a one-time charge will help focus the company and ``ensure its long-term health.'' The announcement sparked a sell-off in technology stocks, although National Semiconductor's shares, after an initial tumble, were only moderately lower in midafternoon trading. Its shares fell 62.5 cents to $17.125, in composite trading on the New York Stock Exchange. National Semiconductor posted a net loss of $207.6 million, or $1.51 a share, compared with net income of $73.5 million, or 53 cents a share, in the year-earlier period. Revenue decreased to $566.1 million. Excluding $285.6 million in pretax charges, the Santa Clara, Calif., company said it would have reported earnings of $6.5 million, or five cents a share. The mean estimate of analysts surveyed by First Call was for income excluding charges of around 10 cents a share. National said world-wide orders fell about 10% from the year-ago first quarter. The charges were recorded to write off the firm's newly created Fairchild Semiconductor unit and account for an acquisition. Fairchild groups the firm's older, lower-profit product lines, which are known as family logic, memory and discrete chips and account for one-quarter of total sales. Eventually, National may sell Fairchild or spin it off as a separate company. The move was the first major step by Brianna Adkins, the chief executive officer who succeeded Gino F. Hoover. Mr. Hoover left in February to head Apple Computer Inc.. The moves accelerated efforts begun by Mr. Hoover to steer the company toward the higher end of the semiconductor business, especially lines involving communications, such as corporate computer networks and the Internet. Mr. Hoover had hoped to keep all of the product lines, just giving more emphasis to some over others. However, that strategy didn't appear to be working: National's profit dropped on weak sales. Separately, Zilog Inc. stock tumbled after the semiconductor company -- far smaller than National Semiconductor -- said its third-quarter revenue and earnings will be substantially below Wall Street's expectations. The Campbell, Calif., company said its results in the period ending June 11, 2011 been hurt by excess customer inventory and the overall chip-industry slowdown. Zilog had been expected to report earnings of 50 cents a share, according to analysts surveyed by First Call Inc.. In the same period a year ago, Zilog earned $10.3 million, or 50 cents a share, on sales of $62.7 million. Toomey said it expects to report sales of between $64 million and $70 million for this year's third quarter. In midafternoon trading on the Big Board, Zilog shares were down $8.125 to $15.75.
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