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Chip Maker Swings to Profit

June 11, 2004|From Bloomberg News

National Semiconductor Corp., which makes chips that boost battery life in mobile phones and laptops, said Thursday that it had fiscal fourth-quarter net income of $126.4 million as demand in Asia helped lift sales 34%.

Net income was 32 cents a share, contrasted with a net loss of $4.4 million, or 1 cent a share, a year earlier, according to the company, which is based in Santa Clara, Calif.

Sales, which rose to $571.2 million in the period ended May 30 from $425.3 million, had their largest gain in at least 10 years, according to Bloomberg data.

It was the fourth straight quarterly profit. Chief Executive Brian Halla has been selling or closing slower-growing businesses, and demand for chips used in mobile phones and cameras has boosted sales.

The company's revenue may miss the highest estimates this quarter as demand slips this time of year, analysts said.

"The numbers are very solid," said Krishna Shankar, an analyst at JMP Securities in San Francisco who rates the shares "market outperform" and said he didn't own them. "Guidance was typical for a seasonal slow summer quarter. Bullish investors who were looking for strong guidance may be disappointed."

National Semiconductor expects sales this quarter to be unchanged or grow as much as 3% from the fourth period. That would be a range of $571.2 million to $588.3 million.

Analysts on average expected $567.6 million, and Shankar said some investors predicted as much as $599.8 million.

The company's shares rose 19 cents to $21.34 on the New York Stock Exchange. They have gained 8.3% this year.

National Semiconductor's orders surged 45% in the fourth quarter, and the company said its biggest gain came from Asia. It is winning more sales of chips to manage power in new mobile phones with color screens and digital cameras that require additional semiconductors.

Worldwide shipments of mobile phones will rise 12% to 595 million this year, researcher IDC said last month.

National Semiconductor's fourth-quarter results exceeded forecasts. Analysts expected 29 cents a share on sales of $559.1 million, the average of 18 estimates in a Thomson First Call survey.

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