DavidG,
I think you have finally seen the light, but much too late for your octobers I am afraid. The last paragraph of the following artilcle sums up my opinions on the "hype" rallies many analysts have been trying to ignite in this sector. I told you they should be viewed as selling opportunities as the analysts are only trying to sell stock that their clients have already bought (example: Gumport from Lehman brothers trying to convince everyone that a recovery started in June by saying "shipments increased 22% sequentially from May. He knows that these statistics are tracked on a 4/4/5 basis and, as a result, June has 25% more shipping days than May and that is why June shipments are so much higher. On a average weekly basis shipments were actually down in June vs May). This will be a very long bottoming process and asia holds the keys to recovery for most semi companies.
National sees big loss
in second half of 1998
By Mark Hachman
Electronic Buyers' News
SANTA CLARA, Calif.--National Semiconductor Corp. here has reversed course from its earlier optimistic forecasts, predicting a "significant net loss" during the second half of 1998.
In management commentary accompanying the chip maker's fiscal 1998 annual report, National adopted a significantly more pessimistic stance towards the same numbers the company first reported in June.
Now, National predicts that its financial performance through the end of the calendar year will be affected by the growing trend towards sub-$1,000 PCs and a slowdown in chip orders. The documents were filed on Monday.
National "remains very cautious about its future outlook, particularly with respect to the personal computer business," the company said. "As a result, the company expects overall revenues, particularly for the first half of fiscal 1999, to be down from the level of revenues recorded in the second half of fiscal 1998, resulting in a significant net loss for the first half of fiscal 1999." National's fiscal year ended May 31.
The Santa Clara company said it expected gross margins to pick up because of manufacturing efficiencies and cost reductions, which include a previously announced, planned reduction in its workforce of about 1,400 employees. National also expects that its fiscal 1999 capital equipment expenses will be lower than in fiscal 1998, primarily because it has already outfitted its new South Portland, Maine production fab.
In 1999, the expenditures will simply entail expanding that fab's existing capacity and research into next-generation manufacturing technologies. But National also warned that a slowdown in orders during fiscal 1998 meant that amount of wafer capacity actually being used had dropped. Until orders pick up again, the company said, its fabs would run at a reduced rate that was undisclosed.
National is also contractually obligated to purchase a minimum of $330 million in goods and services from Fairchild Semiconductor through June 2000, as part of the deal associated with the spinoff of the company in March 1997.
In June, National executives presented a guardedly optimistic outlook. "Current weekly order rates suggest that the market decline may be bottoming out," said Brian L. Halla, National's president and chief executive, at the time. "But visibility is limited and the outlook for the current quarter is essentially flat with the fourth quarter."
Including one-time charges totaling about $159 million, National lost $69.3 million on sales of $510 million for the fourth fiscal quarter 1998. For the entire 1998 fiscal year, National lost $98.6 million on sales of $2,536.7 million, including one-time charges of $72.7 million (see June 12 story).
National's own uncertainty is symptomatic of the directionless path of the chip market, analysts said. Furthermore, any argument - positive or negative - is being seized upon by analysts with their own polarized agendas, said A.A. LaFountain, analyst with Needham & Co. in New York.
"My own take ... is that we're in the midst of a very protracted 'bottom'," LaFountain said. "If you're looking for a repeat of 1996, you're going to be disappointed." National sees big loss
in second half of 1998
By Mark Hachman
Electronic Buyers' News
SANTA CLARA, Calif.--National Semiconductor Corp. here has reversed course from its earlier optimistic forecasts, predicting a "significant net loss" during the second half of 1998.
In management commentary accompanying the chip maker's fiscal 1998 annual report, National adopted a significantly more pessimistic stance towards the same numbers the company first reported in June.
Now, National predicts that its financial performance through the end of the calendar year will be affected by the growing trend towards sub-$1,000 PCs and a slowdown in chip orders. The documents were filed on Monday.
National "remains very cautious about its future outlook, particularly with respect to the personal computer business," the company said. "As a result, the company expects overall revenues, particularly for the first half of fiscal 1999, to be down from the level of revenues recorded in the second half of fiscal 1998, resulting in a significant net loss for the first half of fiscal 1999." National's fiscal year ended May 31.
The Santa Clara company said it expected gross margins to pick up because of manufacturing efficiencies and cost reductions, which include a previously announced, planned reduction in its workforce of about 1,400 employees. National also expects that its fiscal 1999 capital equipment expenses will be lower than in fiscal 1998, primarily because it has already outfitted its new South Portland, Maine production fab.
In 1999, the expenditures will simply entail expanding that fab's existing capacity and research into next-generation manufacturing technologies. But National also warned that a slowdown in orders during fiscal 1998 meant that amount of wafer capacity actually being used had dropped. Until orders pick up again, the company said, its fabs would run at a reduced rate that was undisclosed.
National is also contractually obligated to purchase a minimum of $330 million in goods and services from Fairchild Semiconductor through June 2000, as part of the deal associated with the spinoff of the company in March 1997.
In June, National executives presented a guardedly optimistic outlook. "Current weekly order rates suggest that the market decline may be bottoming out," said Brian L. Halla, National's president and chief executive, at the time. "But visibility is limited and the outlook for the current quarter is essentially flat with the fourth quarter."
Including one-time charges totaling about $159 million, National lost $69.3 million on sales of $510 million for the fourth fiscal quarter 1998. For the entire 1998 fiscal year, National lost $98.6 million on sales of $2,536.7 million, including one-time charges of $72.7 million (see June 12 story).
National's own uncertainty is symptomatic of the directionless path of the chip market, analysts said. Furthermore, any argument - positive or negative - is being seized upon by analysts with their own polarized agendas, said A.A. LaFountain, analyst with Needham & Co. in New York.
"My own take ... is that we're in the midst of a very protracted 'bottom'," LaFountain said. "If you're looking for a repeat of 1996, you're going to be disappointed." |
