National Semi beats Street

June 7, 2001: 12:53 p.m. ET

Chipmaker breaks even where loss was expected, but sees sales shortfall

NEW YORK (CNNfn) - National Semiconductor Thursday said it broke even during its fiscal fourth quarter, where Wall Street had expected a loss, and warned that sales in the current quarter will fall short of prior forecasts.

The Santa Clara, Calif.-based chipmaker said it broke even on a per-share basis during the quarter, excluding restructuring and other extraordinary charges. Analysts polled by earnings tracker First Call had generally expected the company to post a loss of 3 cents per share during the quarter, which ended May 27.

During the same quarter last year, National logged a profit of 68 cents per share.

Including a pre-tax charge of $33.4 million related to layoffs, $16.2 million related to net investment write-offs and $6.6 million in goodwill amortization, the company reported a net loss of $44.4 million, or 26 cents per share.

At $401.2 million, the company's fourth-quarter revenue fell 32.3 percent from $595.3 million during the year-ago period.

Looking ahead, executives of National Semiconductor (NSM: up $0.45 to $28.42, Research, Estimates) also said they anticipate sales in the current quarter will slide even further than they recently expected.

"Due to the low bookings in the fourth quarter we now expect a further decline in sales for the first quarter," Brian Halla, National's chairman and chief executive, said in a statement.

"Going forward, we will continue to closely control costs while investing in key markets to maximize our potential for profitability," Halla added.

During the fiscal first-quarter, National now expects sales to be 15 percent-to-20 percent below the fourth-quarter's level. The Street most recently has expected the company's first-quarter sales to be roughly $391.7 million, suggesting a decline nearer 2.4 percent.

National said it expects its first-quarter gross margins, the percentage of sales remaining after subtracting product costs, may decline up to 10 percentage points. The company attributed to gross-margin decline to unused manufacturing capacity.

On a per-share basis, National said its loss, excluding special items, will range between 30 cents and 35 cents. The Street had recently expected a loss of a penny per share, according to the First Call survey.

Shares of National were up 31 cents at $28.28 in New York Stock Exchange trade shortly after the earnings news was released.