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National Semi warns again
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May 8, 2001: 5:56 p.m. ET
Chipmaker cuts jobs; could post 4Q loss due to slow orders, inventory buildup
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NEW YORK (CNNfn) - National Semiconductor Corp. warned Tuesday it would miss fourth-quarter results and sales forecasts, the second such warning in three months.
The company also said it would cut about 1,100 jobs, or 10 percent of its workforce, citing fewer-than-expected orders and high inventory.
The Santa Clara, Calif.-based computer chipmaker said sales for its fiscal fourth quarter, which ends May 27, will fall 16 percent-to-18 percent from the third quarter. With this revised forecast, National Semiconductor said it now expects quarterly revenue of about $390 million-to-$400 million.
The company also said it expects per-share results to fall anywhere between breakeven and a loss of 4 cents. Wall Street analysts anticipated fourth-quarter earnings of 4 cents a share, according to First Call, which tracks corporate earnings.
The company said orders have been lower than expected and that inventory remains high. Consolidation among cell phone manufacturers, which buy the company's chips, has also hurt.
In March, National (NSM: down $1.19 to $25.00, Research, Estimates) cut its outlook for the quarter to a 10 percent revenue decline, and said it expected earnings of 3 cents-to-5 cents a share.
The company also said it was cutting 1,100 jobs, or about 10 percent of its work force.
"This was a tough action for us to take, especially because it impacts many people who have served National well," said Brian Halla, National's chairman, president and chief executive officer. "However, given the continuing weakness in the marketplace, it is necessary to conform our resources to the market in order to maximize National's opportunity for long-term success."
Charges National will take in the quarter include $10 million-to-$12 million in investment write-offs and $25 million-to-$30 million for its cost-reduction program, which includes the job cuts, the company said.
Overall, the company anticipates annual savings of $70 million-to-$80 million as a result of the cost-cutting moves.
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Technology stocks have taken a beating so far this year, as the slowing economy has dampened demand for basic equipment that makes technology products go. Orders for chips that power everything from cell phones to some toys, are down as companies cut back on manufacturing to reduce inventory and get more in line with demand. 
from staff and wire reports
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