National Semiconductor Beats Forecasts with 24% Drop in Q4 Profit

Chip manufacturer National Semiconductor posted a better-than-expected 24% drop in fiscal Q4 profit, sending its shares up 10.3% to $28.45 in AH trading. Net income came in at $90.1 million ($0.28/share), down from $118.8 million ($0.34) in the year-ago quarter. Revenue was down 20% to $455.9 million from $572.6 million a year ago, but was up 5.8% from Q3 on increasing demand. Analysts were expecting EPS of $0.23 on revenue of $451.3 million. The company said its wireless business was up 33% from the previous quarter and billings increased 16%. Also, inventories were relatively low. "Market conditions signal smoother sailing ahead," said CEO Brian Halla. "We are confident we can continue our growth." The company also announced a $1.5 billion accelerated stock buyback, for which it will take on $1.5 billion in investment-grade debt. This brings the company's total buyback authorization to $2.4 billion.

Sources: Press release, MarketWatch, Reuters, Bloomberg
Commentary: Semis With Highest, Lowest Production To Sales Ratio • National Semi: Relational Investors Boosts Stake By Almost 4M Shares • The Long Case for Semi Stocks
Stocks/ETFs to watch: National Semiconductor Corp. (NSM). Competitors: Analog Devices Inc. (ADI), STMicroelectronics NV (STM), Texas Instruments Inc. (TXN). ETFs: Semiconductor HOLDRs (SMH)
Conference call transcripts: F4Q07

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