National Semi stock falls
National Semiconductor's stock takes a hit after the chip maker says it expects its third-quarter results to fall below analysts' expectations.
National Semiconductor blamed the impending shortfall on weak Asia sales and the difficulty its recent acquisition, Cyrix, has had in ramping up adequate volumes to meet demand.
Following the company's warning, its stock fell 4-5/8, to 23-1/2, down from Friday's close of 28-1/8. Volume exceeded six times its average daily trading, with about 11.4 million shares trading hands.
Analysts are expecting the company to report profits of 39 cents a share, according to First Call. But National said that sales and profits for its fiscal third quarter ending March 1 may end up short of the previous quarter's results of 32 cents a share on revenues of $719.9 million.
The company said shipments for the current quarter have been slowed by uncertainties within the Asia-Pacific markets, as well as with some of the customers who sell into these markets from other regions. National noted that Korea is reducing deliveries for many of the company's products as it reviews the effects of the current economic crisis.
National said sales in Asia for its analog power management and application-specific frequency synthesizer devices, used in portable phones, also have slowed. However, the company expects to see shipments return to more normal levels in the fourth quarter, as inventory is reduced.
Sales from National's recently acquired Cyrix business unit are expected to decline in the third quarter, due to the company's difficulty in ramping up adequate volumes to meet demand during the quarter.
This isn't the first time that Cyrix has been unable to meet demand for its chips. In the June quarter, Cyrix said its biggest challenge was ramping up production for its high-end chips, which produce the highest gross margins. The short supply of high-end chips contributed to a fall in revenue that quarter.