Job Cuts, Upgrade Lift National Semiconductor
Updated from 8:41 a.m. EST
National Semiconductor
(NSM)
rose early Thursday, thanks to a broker upgrade, a move that might provide a much-needed spark for the beaten-down chip sector.
Credit Suisse First Boston upgraded the analog chipmaker to neutral from underperform.
The brokerage expects the chipmaker to divest low-margin businesses, boosting earnings growth.
The upgrade came before the company announced plans to slash 6% of its work force to cut costs and streamline operations. Some 550 U.S. jobs will be lost.
Shares rose 47 cents, or 2.8%, to $17.35, after falling 6% in the past three sessions.
The chip sector has been a major weak spot in the new year. The Philadelphia semiconductor index is down 7.2% in the first three days of trading.
In early December, National Semi said it earned $80 million, or 21 cents a share in the second quarter, up from the year-ago $65.8 million, or 17 cents a share. Excluding items, second-quarter earnings were 18 cents a share, flat with a year ago. Sales fell 5% from a year ago and 18% sequentially to $449 million. The performance was roughly in line with what National Semi projected in a November warning and ended a chip sector rout at the time.
