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To: Oral Roberts who wrote (17030)	9/4/2002 3:40:57 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 17639

cbs.marketwatch.com National Semi: Sales may fall again Chipmaker meets lowered goals but cautious on holidays By Chris Kraeuter, CBS.MarketWatch.com Last Update: 3:26 PM ET Sept. 4, 2002 SANTA CLARA, Calif. (CBS.MW) -- National Semiconductor met reduced financial targets for its fiscal first quarter but the chipmaker said sales could decline as much as 5 percent during the holiday season. "Early indications of consumer demand for the holiday season are not strong at this point and although we have pockets of opportunity they may not be enough to offset weak end-user demand for this quarter," said Chief Executive Brian Halla, according to a statement. Immediately after the announcement, shares (NSM: news, chart, profile) fell to a three-year low of $14.19. However, shares recovered as part of a broad market rally to trade up 1 percent at $15.11 recently. For the quarter ended in August, National reported net income of $1.3 million, or 1 cent a share, on revenue of $420.6 million. During the same quarter last year, National lost $54.6 million, or 31 cents a share, on revenue of $339.3 million. On Aug. 1, National warned investors that its sales would be about $419 million, but that it would remain profitable. Analysts adjusted down their targets accordingly. National had previously expected a profit of 6 to 9 cents a share on sales between $444.7 million and $453 million. Orders declined 11 percent sequentially but were up 36 percent from this quarter last year while weekly order rates rose in July and August over June. PC-related products orders decreased "measurably" from the previous quarter. The company's capacity utilization was 73.6 percent, up slightly from the previous quarter. For the second quarter, National expects sales to be flat or down 5 percent, or as low as $399.6 million. Gross margins will be flat to down and operating expenses will be comparable to the first quarter's. Analysts had expected earnings of 7 cents a share on sales of $441.2 million, on average, for the second quarter. Executives said during a conference call that order backlog is about the same as it was during the previous quarter. Consequently, customers placing orders for products to be shipped during the quarter will determine the company's success this quarter. Chris Kraeuter is a reporter for CBS.MarketWatch.com in San Francisco