National Semi profit, revs beat targets

Analog chipmaker National Semiconductor Corp. (NYSE:NSM - news) reported on Thursday its quarterly profit and revenue topped Wall Street targets, and said orders rose from the prior period, sending shares up 9 percent.

National Semi also said inventory was relatively low, the latest sign it worked through a glut.

Revenue rose 5.8 percent from the preceding quarter, with higher demand for power management, audio, amplifier, data converter and display chips and other products.

Net income fell to $90.1 million, or 28 cents per share, for its fourth quarter ended May 27, from $118.8 million, or 34 cents per share, a year ago.

Revenue dropped to $455.9 million from $572.6 million.

Analysts, on average, expected profit of 23 cents a share, on revenue of $451.3 million, according to Reuters Estimates.

"To briefly recap the full fiscal year, on the down side, it turned out to be a longer inventory correction than many of us expected," said Chief Executive Brian Halla on a conference call. "It was a year that now primes the stage for growth at the bottom and top lines."

National Semi shares fell 52 cents, or 2 percent, to close at $25.79 ahead of its earnings report. In extended trade, the stock jumped to $28.15, a 52-week high.

Shares of rivals Texas Instruments Inc. (NYSE:TXN - news) and Maxim Integrated Products Inc. (Nasdaq:MXIM - news) both rose 2 percent in extended trade.

STOCK BUYBACK

Santa Clara, California-based National Semi also set a $1.5 billion accelerated stock buyback, and will take on $1.5 billion in investment-grade debt to pay for it.

The accelerated plan is part of a new $2.0 billion share repurchase authorization that brings the total to $2.4 billion.

For the current quarter, its first, National Semi said it expects revenue to increase 1 percent to 4 percent from the preceding quarter, implying revenue of $460.5 million to $474.1 million.

Analysts expect a profit of 25 cents per share, on average, on revenue of $461.0 million for the first quarter.

National did not give a per-share profit forecast.

The company also said it expects gross margin to improve in the current quarter, even with operating expenses expected to rise.

Chief Financial Officer Lewis Chew said on the call that its inventory is now at about 10 weeks, which was "relatively low" for the company historically.

Chew also said the higher end of its revenue guidance assumes increased turns orders in the current quarter than in the immediately preceding quarter. Turns orders are placed and shipped in the same quarter.

"The area where we saw growth was new products," said Chief Operating Officer Don Macleod on the call, which he said helped account for its improved gross margin -- a record 62.5 percent in the just-reported quarter.

For the current quarter, Chew said he expects gross margin will rise further to above 63 percent, a figure that includes about $6 million in stock-based compensation expense.

Texas Instruments rose to $35.22 from a
New York Stock Exchange close of $34.39, and Maxim rose to $30.80 from a Nasdaq close of $30.18. [via]