LSI Logic (NYSE: LSI) met reduced fourth quarter targets and warned the pain isn't over yet.
After market close Tuesday, the maker of chips for communications, networking and multimedia applications reported fourth quarter net income of $116 million, or 34 cents per share, excluding goodwill writedowns. That was in line with First Call's analyst consensus estimate, which was reduced after LSI's profit warning in December.
LSI predicted first quarter earnings of 21 cents per share, on revenue of roughly $660.9 million, a 12 percent sequential decrease from fourth quarter sales of $751 million.
Analysts were looking for a first quarter profit of 34 cents per share, on sales of $780.9 million, according to First Call.
Shares of LSI traded at $24 in afterhours activity on the Island ECN, following the release of quarterly results. LSI stock fell 93 cents to $24 in Tuesday's regular trading ahead of the earnings report.
The company now expects to grow about 10 percent for all of 2001, with faster growth in the second half, said Wilfred J. Corrigan, chairman and CEO. First Call consensus was predicting annual revenue growth of 35 percent.
Last month, the company pointed to an oversupply of chips on the market. Now the company sees slowing demand from customers, Corrigan said.
"The global broadband market has clearly eased and networking and storage components are experiencing inventory rebalancing," he said. "Once the inventory buildup has been alleviated, we anticipate seeing a resumption of growth toward the second half of the year for communications applications."
Broadband entertainment business should revive in the second quarter, Corrigan said.
Business is strong for storage components, storage area networking and Sony PlayStation 2 chips, he added.
Fourth quarter revenue increased 28 percent year-over-year and 3.2 percent sequentially.
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