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Update: National Semiconductor Jumps After Beating Estimates

Earnings more than tripled.

Updated from 4:37 p.m. EDT

Shares of

National Semiconductor


jumped 5% Thursday after the company reported that it more than tripled its earnings in the last quarter, soaring past Wall Street estimates on strong sales growth and savings from cuts in manufacturing costs.

The Santa Clara, Calif.-based maker of microprocessors and other semiconductor products said earnings for its first fiscal quarter rose to $149.4 million, excluding $6.4 million in pretax one-time charges relating to the July acquisition of the privately-held Arizona-based display design company

Vivid Semiconductor

and restructuring measures. The company reported a profit of $47.1 million for the same year-ago period.

National Semiconductor earned 76 cents per share, excluding the pretax charges, in the first quarter, which ended Aug. 27. That's 11 cents per share higher than the consensus estimate among analysts surveyed by

First Call/Thomson Financial


National Semiconductor's revenue leapt 33% in the first quarter, to $640.8 million from $481.8 million during the same year-ago period. Worldwide orders for its key products, including analog, wireless and Internet communication devices, increased 34% from a year ago, with orders increasing from the previous quarter in all regions except Europe.

The company also said that it was able to increase its gross margins by 2% to a record 53% in the first quarter by streamlining its manufacturing costs and boosting operational capacity.

Shares of National Semiconductor ended the day up $2.38 at $46.88. That's up from its recent trading range, but still nearly $40 below the 52-week high of $85.94 the stock reached in March.

In a conference call, company officials said they anticipate continued sequential sales growth of 6% to 8% this quarter from the previous quarter, and around 35% year-over-year sales growth. Continued expansion of gross margins are expected to offset ongoing increases in research and development and other expenses.

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"We continue to execute on our strategy of moving to higher margin products, improving manufacturing efficiency, partnering with customers to provide integrated solutions, and targeting growing markets that build on our strengths in analog and mixed signal devices," said Brian Halla, chairman, president and chief executive, in a statement.

Halla said the company made gains in new wireless markets, with increased sales of a new integrated chipset for handheld phones, and has now built partnerships with most of the world's largest electronics and personal computer makers to help create Internet access devices.



remains its top customer, but Halla said business has remained strong as well with


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Halla expects National Semiconductor's infrastructure business to account for 40% of its total business with top customers, Ericcson and Motorola, in the near future.

Company officials said they expect earnings growth of more than 30% for the fiscal year 2001.

"We've been very consistent in sequential earnings improvement," said Don Macleod, chief financial officer. "We think we have a nice profile going here."