In our Semiconductor Sector Overview, we saw how the tough memory market, driven by oversupply and weak demand, was leading to a decline in the chip sales. In this post, we will review the performance of Micron and National Semiconductor.

On April 2, Micron Technology Inc. (MU), the largest producer of computer memory chips in the US with annual revenue of $5.8 billion, reported a dismal second quarter and a ninth consecutive quarterly loss. Earlier coverage is available here and here.

Yesterday, Research In Motion Limited (RIMM), a world leader in the mobile communications market reported a strong fourth quarter that beat estimates driven by the success of its BlackBerry Storm, which initially had some technical problems in its release in Q3.

Q4 revenue was up 84% y-o-y and 24.5% q-o-q to $2.78 billion on a shipment of 7.8 million devices (up 80%). Net income was $518.3 million or $0.90 per share versus $412.5 million, or $0.72 per share last year. Analysts expected revenue of $3.4 billion and earnings of $0.84 per share.

On March 25, Paychex, Inc (PAYX) reported third quarter results that met analyst estimates. However, the company cut its fiscal-year revenue forecast for a third time and said it expects the economy to continue to be difficult through 2009 and into fiscal 2010. I have been tracking the performance of this leading payroll and personnel services provider to get an insight into the health of the economy. Previous coverage is available here and here.

Q3 revenue was down 1% to $528.6 million. Net income decreased 8% to $130.8 million or $0.36 per share as losses in investment income offset gains in other areas. Analysts expected earnings of $0.36 per share on revenue of $536.9 million.

3Com, one of the key networking players with annual revenue of $1.3 billion, has been steadily improving. In its 3Q results for fiscal 2009 reported on March 19, 3Com Corporation (COMS) reported a third consecutive quarter of profits that beat estimates. The company’s performance was driven by its cost control efforts and strength in China as well as in the TippingPoint (intrusion prevention systems, or IPS) business.

Q309 revenue, however, was down 3.5% to $324.7 million and also missed analyst estimates of $332.3 million and its own guidance last quarter. Net income was $1.9 million, or $0.00 per diluted share, compared with a net loss of $7.8 million, or $(0.02) per share in Q308. Non-GAAP net income was $49.1 million, or $0.13 per diluted share, compared with net income of $34.2 million, or $0.08 per diluted share last year.

In my recent piece on Oracle, I said, Oracle’s entry into SaaS is inevitable, and it will happen probably as early as this year. Let’s look at two companies that are potential acquisitions for Oracle (ORCL) this year.

In its fourth quarter and fiscal year 2008 results released February 10, NetSuite (N) reported its first non-GAAP net profit in the face of the economic downturn - one more example of how the SaaS sector is relatively recession-proof. RightNow is another SaaS company that recently turned profitable.

On March 2, InterDigital reported a strong fourth quarter. As we saw in our most recent post on the company, InterDigital (IDCC) resolved its long-running 2G and 3G licensing disputes with Samsung (SSNLF.PK). This resulted in their signing a 2G and 3G patent agreement with Samsung that will generate $400 million cash over 18 months. With this deal, InterDigital has about 50% of the 3G market. Let’s take a closer look at its performance.

Q4 net income increased to $3.8 million, or $0.09 per fully diluted share from net loss of $2.0 million or $0.04 per share in Q4 07. Revenue was $58.7 million, an increase of 7% y-o-y and 6.5% q-o-q due to $4.1 million increase in technology solutions revenue and a $3.8 million increase in past infringement. However, this was partly offset by declining royalties from licenses in Japan that led to $4 million decline in recurring revenue. Recurring patent license royalties were $46.3 million in the quarter while technology solution sales were $5.1 million.

In a season in which so many companies are producing disappointing results, gems like athenahealth still exist. athenahealth (ATHN) is a leading provider for the healthcare industry’s billing and practice management solutions. athenahealth just completed its first year as a public company. I recently spoke with Jonathan Bush, athenahealth’s CEO. You can read the interview here.

athenahealth uses a combination of web-based practice management and electronic medical records (EMR) software, real-time payer knowledge, and offers business services that range from eligibility verification to claims submission to insurance collection – an excellent illustration of SaaS-enabled BPO.. Their workflow management solution has also been talked about for its ability to transform the healthcare sector as they make its various processes more efficient.

Weak demand and economic conditions in the semiconductor sector finally have taken a toll on Samsung Electronics (SSNLF.PK), the world’s second-largest semiconductor producer. On January 23, Samsung reported its first ever quarterly loss in in the fourth quarter and in fact its first ever loss since 2000, when it started reporting quarterly results. However, the good news is that its handset sales posted a slight increase. Earlier coverage is available here and here.

Q4 revenue was down 4% q-o-q to 18.45 trillion Korean won or $13.9 billion. Net loss was 0.02 trillion won or $15 million. For the fiscal year 2008, revenue was down 15% to 72.95 trillion won ($55 billion) while net income was down 26% to 5.53 trillion won ($4 billion).

After reporting a solid third quarter that beat estimates and declaring its first dividend, on Monday Oracle (ORCL) decided to go on a shopping spree. It started the quarter by acquiring Relsys International, which provides drug safety and risk management software. There are also speculations about Oracle acquiring Red Hat (RHT), but the enterprise software giant continues to avoid acquisitions in the SaaS space. Let’s explore why.

First, we’ll take a close look at its recent acquisitions. Last month, Oracle bought mValent Inc., a small manufacturer of software that helps to configure other software. This acquisition is expected to enhance Oracle’s enterprise management solution for end-to-end application configuration management. The Relsys acquisition, on the other hand, is supposed to strengthen Oracle’s position in the pharmaceutical industry. It created a Health Sciences business unit last year. Both acquisitions are for undisclosed amounts, but mValent is estimated to be less than $10 million.

The recession does not seem to be good for the educational gaming company LeapFrog, which announced rather depressing Q4 2008 results earlier this month. The company has been trying to do a turnaround and with its new product, Tag, the 2008 holiday season was extremely critical.

Q4 revenues of $137.8 million were significantly lower than the market’s expectations of $180.0 million and fell 24% over the year. Loss per share of $0.70 was also higher than the Street’s expected $0.21 and increased significantly from the loss of $0.51 per share suffered last year. Net sales in the US segment were $105 million, down 22% from a year ago.

All four major EDA players recently announced their results which, as expected, were not too encouraging. In this piece, we will provide an analysis of the industry’s recommended moves for the immediate future.

Synopsys

MasterCard’s (MC) SpendingPulse recently reported that the 34% decline in sales of luxury items was the highest year-on-year decline of any retail category during the holiday season and that the reduction was led by falling jewelry sales. In such conditions, it is not surprising that Blue Nile (NILE) recently announced a lackluster Q4 performance.

Q4 revenues of $85.8 million were significantly lower than the Street’s estimates of $92.2 million and recorded a 23.3% reduction over the year. EPS of $0.24 also fell short of the market’s expected $0.34 and recorded a significant 47% decline over the year. For the year, revenues fell by 7.5% to $295 million. EPS of $0.75 were down 28% over the year.

On Thursday, Palm (PALM) reported a dismal Q3 as losses widened and revenue plunged 71% due to pricing concessions and weak sales of its aging portfolio. The much-awaited Palm Pre, which is expected to bring the company back to profitability, is on track to be launched on Sprint (S) in the first half of the year.

Q309 revenue was down 71% y-o-y and 53% q-o-q to $90.6 million, much less than analyst estimates of $150 million. Decline in revenue is also due to the late shipment of the Treo Pro and weak spending in the tough economy. Net loss was $98 million or $0.89 per share compared to $57 million or $0.53 per share in Q308. Non-GAAP net loss was $94.7 million or $0.86 per share.

On February 19, Brocade Communications Systems, Inc. (NASDAQ:BRCD), a leading supplier of data center networking solutions with annual revenue of $1.5 billion, reported first quarter results that beat earnings estimates. This was the first quarter report since the company completed the $3 billion acquisition of Foundry in December. With the Foundry acquisition, Brocade offers strong competition to Cisco (CSCO) in the niche area of end-to-end data center solutions. Cisco has been active in this area recently with the introduction of the unified computing system. And IBM apparently wants to stall Cisco’s data center plans with a $7 billion acquisition of Sun (JAVA).

Q1 revenue was up 24% y-o-y and 8% q-o-q to $431.6 million, short of analyst estimates of $442 million. Q1 revenue included about one month of Foundry revenue or $60 million and was largely driven by strong demand for the DCX platform, embedded switches for bladed servers and global service offerings. GAAP net loss was $26.0 million or $0.07 per share. Non-GAAP net income was $63.6 million or $0.15 per share versus analyst estimates of $0.13 per share.

Boy, I wrote the last Sun piece with a recommendation for Sun (JAVA) to hold on to its OpenSource business, and divest the hardware business, and thought that Cisco (CSCO) may be interested in the DataCenter business in particular.

And the news Wednesday morning was that IBM is considering buying Sun for about $7 billion.

Earlier in the month, Marvell Technology Group (NASDAQ:MRVL), one of the leading chip makers, reported fourth quarter results that beat estimates. However, in response to the deteriorating economic environment, Marvell continued with its cost reduction efforts and cut about 7% of its workforce. For a closer look at Marvell, see Vijay Nagarajan’s strategy series from last year, although the valuation analysis went completely off the rails when the financial crisis hit in September.

For fiscal year 2009 ending January 31, 2009, revenue was up 2% to $2.95 billion. GAAP net income was $147 million, or $0.23 per share compared with a GAAP net loss of $114 million, or $0.19 per share last year. Non-GAAP net income was $482 million, or $0.76 per share.

Last year when Sun Microsystems (NASDAQ:JAVA) took over MySQL, I asked if it would get into open source applications.

Sun’s Q2 revenues of $3.22 billion were in line with the market’s expectations even though they were down 10.9% over the year. However, EPS of $0.15 per share was significantly lower than last year’s $0.50.

In the past week, Motorola (MOT) has released two products: MC55 EDA enterprise smartphones based on Windows Mobile and Stature i9, an iDEN phone, with Sprint (S). According to a recent Gartner report, worldwide mobile phone sales declined 5% in the fourth quarter and Motorola slipped to the fifth position, its market share crumbling from 11.9% last year to 6.9% due to the lack of 3G products and touchscreen devices in its portfolio. Let’s take a closer look at the company’s recent performance. Earlier coverage is available here and here.

On February 3 Motorola reported Q4 and fiscal year 2008 results that were in line with analyst estimates despite declining mobile sales (Call Transcript). For the full year 2008, revenue was down 18% to $30.1 billion and net loss was $1.84 per share. Q4 revenue was down 26% to $7.1 billion and net loss was $3.6 billion or $1.57 per share including a total net charge of $3.6 billion or $1.56 per share.

After disappointing results for last quarter, Energy Recovery Inc (ERII) beat the market’s expectations this quarter, and the company gave a positive outlook for the coming quarters. For an in-depth look at the global water crisis and business opportunities therein, read Dominique Trempont’s Water Shortages: Opportunities for Entrepreneurs.

Revenues of $22.0 million with EPS of $0.10 were higher than the Street’s expectations of $21.6 million with EPS of $0.08. Quarterly revenues grew 59% and EPS 67%. For the year, revenues of $52.1 million grew 47% and EPS of $0.18 grew 29%.

In times when most companies are either reducing their outlooks or even refraining from giving them, health portal WebMD, one of my favorite Internet stocks , not only announced Q4 results that beat the market’s expectations but also reaffirmed its 2009 outlook.

Q4 revenues of $111.5 million exceeded the Street’s expectations of $106 million and recorded annual growth of 15%. EPS of $0.23 also beat the market’s expectations of $0.18 though it recorded a decline of 32% over the year.