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National Semiconductor Reports Disappointing Earnings, Blames Economic Crisis and Production Issues

Strategic Insights

— 1 min read

National Semiconductor Corporation today reported its earnings for the third quarter of fiscal 1998, falling short of analysts' estimates. The company's revenue declined 9% to $650.1 million, and it attributed its disappointing results to the Asian economic crisis and difficulties in increasing production of microprocessors at its Cyrix Corporation subsidiary. National also announced that it had begun its own production of higher-speed versions of chips at a plant in Portland, Maine.

Key Takeaways:

  • National Semiconductor reported earnings of $22.3 million, or 13 cents a share, for the third quarter of fiscal 1998, down from $200.2 million, or $1.02 a share, in the same period a year earlier.
  • The company's revenue fell 9% to $650.1 million, compared to $712.0 million in the third quarter of the 1997 fiscal year.
  • National attributed its disappointing results to the Asian economic crisis and difficulties in increasing production of microprocessors at its Cyrix Corporation subsidiary.
  • The company also reported a one-time charge of $5.2 million related to the acquisition of audio compression technology from the Gulbransen Corporation.
  • As a result of the uncertain business environment, National is aggressively pursuing cost reduction actions and driving revenue growth for the future.
  • The company's president and CEO, Brian L. Halla, stated, "As a result of this uncertain business environment we are aggressively pursing cost reduction actions and obviously continuing to drive revenue growth for the future."

Statistics:

  • National Semiconductor's earnings for the third quarter of fiscal 1998: $22.3 million
  • Earnings per share (fully diluted): 13 cents
  • Revenue for the third quarter of fiscal 1998: $650.1 million
  • Revenue decrease: 9%
  • QT 1997 revenue: $712.0 million
  • One-time gain from sale of Fairchild Semiconductor in March 1997: $202 million
  • One-time charge related to acquisition of audio compression technology from Gulbransen Corporation: $5.2 million

Sources:

  • National Semiconductor Corporation press release, dated March 1, 1998
  • Bloomberg News, "National Semiconductor posts quarterly loss", March 1, 1998
  • First Call, earnings estimates for National Semiconductor
  • Reuters, "National Semiconductor reports mixed fourth-quarter results", March 1, 1998

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