National Semiconductor Corp. (NYSE: NSM) met analysts' estimates in its fourth quarter Thursday but still lost $40 million, or 24 cents a share, on sales of $486 million.
Its shares closed up 1 3/16 to 22 1/2 ahead of the earnings report.
First Call consensus expected National Semi to lose 24 cents a share in the quarter.
Including a one-time charge of $688.4 million for dumping the Cyrix processor business, the company lost $783.5 million, or $4.65 a share, in the quarter.
On the bright side, company officials now expect to return to profitability by the second quarter.
"We are now on track to be profitable in the November quarter," said CEO Brian Halla in a prepared release. "The PC processor business accounted for approximately $45 million in losses during the fourth quarter, and we will complete our exit from that business during the summer quarter."
For the year, National Semi lost $220.6 million, or $1.32 a share, on sales of $2 billion, a far cry from the previous year when it earned $72.7 million, or 44 cents a share, on sales of $2.5 billion.
National shares hit a 52-week high of 22 3/4 in May after falling to a low of 7 7/16 in October.
Last quarter, National lost $27.2 million, or 16 cents a share, on sales of $500 million.
In the fourth quarter, National Semi said bookings grew 17 percent from the third quarter and 23 percent compared to the year-ago period.
"Our robust on-going analog business continues to show evidence of a broad-based recovery in the semiconductor marketplace," Halla said. "In addition, the information appliance market is now becoming a reality for us."
Company officials said orders from North America and Asia led the seasonal improvements and year-over-year gains while sales into Europe were basically flat.
National Semiconductor investors did get some good news earlier this week when a trade association reported a very bullish outlook for the chip industry in 1999 and 2000.
First Call consensus expects it to lose 15 cents a share in its first quarter but rally for a profit of 53 cents a share in the fiscal year.
Sixteen of the 21 analysts following the stock maintain either a "buy" or "strong buy" recommendation on the stock.