LSI................................
dailynews.yahoo.com
Tuesday April 24 4:54 PM ET
LSI's Profits Match Estimates; Rough Road Ahead
by Duncan Martell
SAN FRANCISCO (Reuters) - Specialty chipmaker LSI Logic Corp. (NYSE:LSI - news) on Tuesday reported first-quarter profits that matched reduced estimates and said it expects to report a second-quarter loss amid a continuing slump in demand for semiconductors.
Milpitas, California-based LSI Logic said that net income before amortization of goodwill and other items fell to $9.5 million, or 3 cents a share, from $88 million, or 26 cents, a year ago. Sales declined 16 percent to $517.2 million from $615.2 million.
The results matched the consensus estimate of 3 cents and all surveyed estimates were either 3 cents or 4 cents, according to Thomson Financial/First Call. Sales were forecast at $524.5 million.
LSI said it expects second-quarter sales to decline about 10 to 15 percent from the $517 million reported in the first quarter and expects to report a second-quarter loss of 7 cents a share before special items. Second quarter gross margin is expected to be about 38 percent.
In last year's second quarter, LSI Logic reported net income before special items of $98 million, or 29 cents a share, on sales of $644 million.
``Our first-quarter financial results were impacted by the abrupt decline of the U.S. economy, weakened end-demand and the widespread accumulation of inventory'' among customers and distributors, said LSI Logic Chairman and Chief Executive Wilfred Corrigan. ``While our visibility is limited, there are indicators that point to the resumption of revenue growth in the second half of the year.''
Corrigan's comments echo those of No. 1 chipmaker Intel Corp.'s Chief Financial Officer Andy Bryant last week that the largest maker of microprocessors and a tech bellwether now expects a seasonally stronger second half of the year.
Other chipmakers, too, have reported an improvement in what is known as visibility -- how confident firms are of demand and sales forecasts going forward one to two quarters.
Communications chipmaker PMC Sierra Corp. also said last week that it is now better able to gauge demand than in the past several quarters.
Also on Tuesday, Chipmaker C-Cube Microsystems Inc. (NasdaqNM:CUBE - news), which is being acquired by rival LSI Logic Corp., reported first-quarter results that topped forecasts as sales fell 18 percent amid a decline in demand for semiconductors.
Milpitas, California-based C-Cube said income from continuing operations fell to $1.21 million, or 2 cents a share, from $7.08 million, or 14 cents, a year ago. Sales fell to $50.1 million from $61 million.
Analysts had forecast the company to earn 1 cent to 2 cents a share, with the consensus average forecast at one penny, according to Thomson Financial/First Call. Sales were expected to be $51.5 million, based on estimates from two brokerages.
Shares of C-Cube fell 7 cents to $15.23 on the Nasdaq. The stock has risen about 24 percent since the end of last year while the Philadelphia Semiconductor Index has risen about 7 percent.
LSI Logic shares fell 40 cents, or 2 percent, to $19.50 on the New York Stock Exchange (news - web sites). Since the end of last year, the stock has outperformed the Philadelphia Semiconductor Index by 7 percent, while the index itself is up 7 percent. |
