National Semi boosts profit on record gross margin
Dylan McGrath
EE Times
(03/09/2006 1:05 PM EST)
SAN FRANCISCO — National Semiconductor Corp. Thursday (March 9) reported a fiscal third quarter net income of $130.1 million, up 13 percent sequentially and 68 percent year-to-year.
National said its fiscal third quarter profitability improvement was driven primarily by a significant increase in quarterly gross margin, which exceeded 60 percent for the first time in the company's history.
National reported fiscal third quarter revenue of $547.7 million, up 22 percent from the $449.2 million the company reported for the third quarter of fiscal 2005. Sequentially, revenue increased less than one percent ($3.7 million) from $544 million in the fiscal second quarter.
Fiscal third quarter net income of $130.1 million, which equates to 37 cents per share, was up from $77.4 million for the third quarter of fiscal 2006 and from $114.7 million for the fiscal second quarter of this fiscal year. National's gross margin of 60.7 percent in the fiscal third quarter was up from gross margins of 52.7 percent in the year-ago quarter and 57.2 percent in the prior quarter.
National (Santa Clara, Calif.) said the continued improvement in gross margin is a direct result of the company's focus on growing its analog product portfolio. In the third quarter, gross margin was also aided by improvements in manufacturing volume and efficiencies, the company said.
"Business conditions were stronger than we had originally anticipated," said Brian L. Halla, National chairman and CEO, in a statement. "We reached our interim goal of 60 percent gross margin earlier than we expected and at the same time continued to gain market share in the analog standard linear market."
National said it anticipates that revenue will grow 2 to 4 percent during the fourth quarter of fiscal 2006, putting it in the $557 million to $570 million range, with gross margin also expected to increase slightly.
National declared a cash dividend of 3 cents per outstanding share of common stock, to be paid April 10 to shareholders of record as of the close of business March 20. National said it bought back $200 million of common stock under a previously approved stock repurchase program during the fiscal third quarter.
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