National Semi: Profit Beats Street, But Plans to Cut Workforce 26%

| About: National Semiconductor (NSM)

National Semiconductor (NSM) Wednesday morning announced plans to cut its 6,500-member workforce by 26%. The chip maker said it will immediately eliminate 850 jobs in sales, marketing, manufacturing, support and other functions, with another 875 cuts to follow over the next several quarters as the company shuts a test and assembly plant in Suzhou, China and a wafer fab in Arlington, Texas.

The company said the cuts will result in $160 million to $180 million in one-time charges.

The company also posted sales for its fiscal third quarter ended March 1 of $292 million, slightly short of the Street consensus at $295.6 million, down 31% sequentially and off 36% year over year. The company posted a profit of 9 cents a share in the quarter, which beat the Street consensus for a loss of 5 cents.

National also warned that sales in the fiscal fourth quarter will be down 5%-10% sequentially, which implies a range of $263 million to $277 million, well below the Street at $292.6 million. The company said that its distribution channel “continues to be negatively impacted by the weak economy.”

NSM Wednesday morning is down 22 cents, or 1.9%, to $11.48.

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