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National Semi earnings hit hard

The company posts lower third-quarter earnings from a year ago and warns of falling revenue with the likelihood of a loss.

In another decline by a major chipmaker, National Semiconductor (NSM) today posted lower third-quarter earnings from a year ago and warned of falling revenue with the likelihood of a loss in the next reporting period.

The company blamed part of its dismal report on its Cyrix subsidiary, which was bought in November. In connection with the purchase of the chipmaker, National recorded a one-time charge of $30 million.

"As we indicated on February 2, market conditions due to the Asian economic crisis and difficulties in ramping up adequate volumes of new products in our recently acquired Cyrix subsidiary impacted our results in the quarter," chief executive Brian Halla said in a statement. "As a result of this uncertain business environment, we are aggressively pursuing cost reduction actions and obviously continuing to drive revenue growth for the future."

Excluding the one-time Cyrix charge, the company earned net income of $26.2 million (16 cents per share) for the third fiscal quarter ended March 1, down from $28.7 million (18 cents) for the like period a year ago. Quarterly sales rose to $650.1 million from $564.5 million.

National has begun cost-cutting measures in response to the bleak report. For example, all workers will be asked to take at least five days off before May 31, unpaid if necessary, a spokesman disclosed today.

The company will also accelerate the planned shutdown of a chipmaking plant in Santa Clara, California, to May from November. About 280 people work at the plant, and some of those are expected to be laid off.

In its earnings statement, the company also said: "As orders in networking, wireless communications, and personal computer markets continue to be impacted by inventory adjustments, the company now expects revenue to decline with the likelihood of a loss in the fourth quarter."

The company's stock fell in after-hours trading.

As reported earlier, Intel, Compaq Computer, and Motorola have reported that their quarterly earnings will fall below Wall Street's expectations. Chipmaker AMD warned that its first quarter results would "decline significantly."