National Semi 1Q Profit Down 63% But Sees Better 2Q

   DOW JONES NEWSWIRES 
 

National Semiconductor Corp.'s (NSM) fiscal first-quarter profit dropped 63% as revenue dropped by a third, but the analog chip maker indicated demand was rebounding.

The analog-chip maker forecast fiscal second-quarter revenue of $325 million to $340 million, above Wall Street's estimate of $315.9 million. National Semi's bullish outlook echoes rival Texas Instruments Inc. (TXN), which on Wednesday sharply raised its fiscal third-quarter guidance.

"Demand was better than we expected, especially for our power management products going into broad industrial applications," said Chief Executive Brian Halla.

National Semi, whose chips help run cellphones, cars and high-definition televisions, has cut costs as it shifts to more lucrative products for specific markets, particularly energy management.

For the quarter ended Aug. 30, National Semi reported a profit of $29.8 million, or 13 cents a share, down from $79.6 million, or 33 cents a share, a year earlier.

The latest results included $5.7 million in restructuring charges, compared with $1.1 million in similar costs in the prior-year quarter. Analysts estimated per-share earnings of 7 cents, according to a poll by Thomson Reuters.

Revenue dropped 33%, to $314.4 million. In June, National Semi predicted revenue of $285 million to $305 million.

Gross margin fell to 61.1% from 66%, a record high for the company.

Bookings grew 17% from the fiscal fourth quarter on higher order rates in North America, Europe and Japan. Total billings exceeded bookings in the first quarter.

National Semi's shares were at $15.90, down 0.4%, in after-hours trading. The stock has gained three-quarters from a five-year low in November but is still down about 15% from a year ago.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357; [e-mail]