that its orders and bookings were better than expected in the fourth quarter isn't producing the usual optimism about the mobile-phone market it supplies.
"Usually, National Semiconductor is a pretty good tell," said Joseph To, an analyst at Lehman Brothers. "But in this case, I would not want to jump to conclusions."
On Monday the analog chipmaker -- which gets 25% of its sales from the wireless sector -- raised its fourth-quarter sales outlook, saying it is making "good progress" in key target segments, such as mobile-phone handsets and displays. National Semiconductor now expects revenue to increase 12% to 13% from $369.5 million in the third quarter. Previously, it predicted sequential sales growth of 6% to 9%.
That handset sales predictions remain steady --
expect sales of about 420 million in 2002 -- suggests that not much is new in the mobile-phone market, To says.
"Handset sales have come back," he said. "But they have been back for a quarter or two."
Instead, experts attribute the chipmaker's success to market-share gains and new products. "We are doing well because we are gaining content in cell phones," said Robert Ashe, a company spokesman.
In the last year, National Semiconductor has become a strategic vendor for Nokia. Also, in December, the company introduced a chipset that integrates four functions on a cell phone.
"The new product is getting them more money from the handset market," said To.
On June 6, National Semiconductor is scheduled to report fourth-quarter results and offer a first-quarter outlook. At that point, the company will likely also talk more about trends in its key markets.
Meantime, National Semiconductor also said it would be cutting 150 jobs, or just under 2% of its global workforce. The reductions will come from its wireless networking and set-top box divisions. As a result of the headcount actions, the chipmaker will take a charge in the fourth quarter.
The chipmaker closed Monday up 62 cents, or 1.9%, to $33.90, amid a broader tech selloff.