Earnings Preview: National Semiconductor

| About: National Semiconductor (NSM)
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National Semiconductor (NYSE:NSM) is expected to report Q1 earnings after the market close on Thursday, September 10, with a conference call scheduled for 4:30 pm ET.


The consensus estimate is 7c for EPS and $300.48M for revenue, according to First Call. Guidance from management on its last earnings call was for Q1 revenue of $285M-$305M, above consensus estimates at the time. For Q1, Morgan Keegan expects National Semi to report upside consensus expectations, and feel more comfortable with its higher estimates of 8c on revenues of $300.5M.

Analyst Views

Morgan Keegan believes that upside relative to street expectations should be driven by continued cost management coupled with continued momentum in the PC and handset end markets. Bookings from both the handset and computing end markets were up 50% sequentially in the May quarter and the book-to-bill ended the quarter above 1.0. Morgan Keegan is expecting to see a sequential improvement in gross margin as a result of higher utilization and continued cost saving efforts. They are modeling a 70 bps sequential improvement gross margin or 59% for Q1. The firm expects National Semi to provide Q2 guidance that is above the street expectations of 10c on $315.88M, but expect it to be slightly below Morgan Keegan's high on the street estimates of 11c on $320.4M. The firm expects the second half of the year to return to more normal seasonality.