LSI Logic Swings to a Loss

Updated from 4:50 p.m. EDT

LSI(LSI Quote - Cramer on LSI - Stock Picks) fell deep into the red in the second quarter, as hefty acquisition charges and weakening sales took a toll on the bottom line.

LSI said it lost $378 million, or 50 cents a share, in the three months ended July 1. At this time a year ago, LSI had net income of $53.8 million, or 13 cents a share.

Backing out $340 million in charges related to its April acquisition of Agere Systems, as well as stock option compensation expenses, LSI said it lost 2 cents a share, in line with Wall Street expectations.

The results, which represent LSI's first full quarter with Agere under its roof, represent an inauspicious start to the company's new business.

Sales of $670 million were 23% below the combined revenue of $871 million that the two separate companies generated at this time last year.

Analysts polled by Thomson Financial were expecting $661.4 million in sales after LSI's June preannouncement, in which it pared back its financial guidance and announced plans to cut its workforce by 13% and sell its consumer chip business

On Wednesday, LSI detailed further changes designed to save costs, saying it will sell its chip assembly and testing facility in Thailand for $100 million, and transition its chip and storage system assembly operations in Singapore and Wichita, Kansas, to third-party manufacturers.

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