National Semiconductor Corp reported its fifth consecutive quarterly loss, posting fourth-quarter results that were dragged down by recent restructuring moves as it exists the business for PC chips. The Santa Clara, California-based company showed a net loss for the quarter of $783.5m on revenue that slipped 6.5% from the year ago period to $477m. Results for the quarter were hit by a one-time net restructuring charge of $688.4m related to the company’s previously-announced decision to exit the standalone Cyrix PC processor business and to sell a majority interest in its 8-inch wafer manufacturing facility in Maine.
Charges aside, the loss was $40m, or $0.24 per share, matching the consensus estimate of analysts surveyed by First Call. In connection with the restructuring, the company also recorded one- time charges totaling $55.1m against revenues, cost of sales and SG&A, primarily related to processor inventory write-offs and product returns. Without those charges, actual revenue for the quarter was $486m. In the same quarter last year, the net loss was $212.4m, including $159m in acquisition and restructuring charges, and $69.3m without them.
The company says it expects to return to profitability in the second quarter of next fiscal year after it fully divests itself of the Cyrix business, which it acquired in November 1997 in a failed bid to compete with PC chip leader Intel Corp. Analysts are looking for a loss of $0.15 per share next quarter and a profit of $0.05 after that. The PC processor business accounted for $45m in losses during the fourth quarter and will be completely abandoned during the current quarter, the company says. Overall bookings during the quarter rose 17% over the third quarter and 23% over the year-ago quarter. Excluding Cyrix orders, new bookings grew 21% and 26%, respectively.
For the full fiscal year, net loss was $1.0bn, compared with a loss of $98.6m last year, as revenue fell 22.9% to $1.96bn. Total restructuring charges for the year amounted to $700.9m, while last year’s numbers included combined restructuring and acquisition-related charges of $166.7m. Excluding one-time items, the loss for this year was $220.6m, compared with a year-ago net profit of $72.7m, or $0.44 per share.
Looking ahead, Nat Semi says its analog business continues to show the signs of a recovery in the overall semiconductor market, while the information appliance market is also becoming a reality for the company. In May, it booked the first orders from Philips Electronics NV for set-top boxes that will be used for America Online Inc’s AOL TV service. It also signed an agreement to collaborate with Acer Inc to develop additional set-top box applications.
