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Nat'l Semi falls on warning
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October 24, 2000: 12:20 p.m. ET
National Semiconductor plunges 32 percent on earnings warning
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NEW YORK (CNNfn) - The stock of National Semiconductor lost about one-third of its value after the company warned investors that its fiscal second-quarter sales and earnings may be below previous expectations.
In a news release issued after markets closed Monday, the Santa Clara, Calif.-based chip maker said sales and earnings for its second quarter of fiscal 2001, ending Nov. 26, and its fiscal third quarter, ending Feb. 25, may be below those for the first quarter.
National Semi's (NSM: Research, Estimates) stock fell $11.94 to $25, a 32 percent drop, in Tuesday morning trading. 
At last count, the consensus estimate of 17 analysts polled by earnings tracker First Call was for National Semiconductor to earn 77 cents per share during the fiscal second quarter and 79 cents per share during the fiscal third quarter.
National Semiconductor reported earnings per share, excluding one-time charges, of 76 cents on sales of $641 million for its first quarter, which ended Aug. 27.
The company said it now expects second-quarter sales to decline between 6 and 8 percent from the first quarter and to resume sequential growth in the third quarter. This may result in a drop of approximately 2.5 percentage points in gross margin from the 53 percent in the first quarter and a corresponding decline in earnings per share, National Semiconductor said. The company expects its operating expenses to remain unchanged in the second quarter.
In a conference call Tuesday morning, National Semiconductor's chief financial officer, Donald Macleod, said that the company's fiscal third-quarter revenue would increase 3 to 5 percent from the second quarter. Macleod said gross margin for the third quarter, ending in February, would be 51 percent.
National Semiconductor blamed the lowered forecast on "inventory corrections" being made by some of its customers in the mobile phone market. Bookings for personal computer products have strengthened, but at a lower rate than seasonally expected, National Semiconductor said.
National Semiconductor makes chips for the information appliance, personal computing, consumer and communication markets. It had sales of $2.1 billion in fiscal 2000 and has about 10,500 employees worldwide. 
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