National Semiconductor Posts $783.5M Q4 Loss

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June 11, 1999 (3:45 AM EDT)

National Semiconductor Posts $783.5M Q4 Loss

By Richard Richtmyer,

After taking a one-time restructuring charge for the divestiture of its PC-processor business, National Semiconductor Thursday reported a quarterly loss of $783.5 million, or $4.65 per share, for the period ending May 30.

Excluding the special charges for the quarter, which totaled $743.5 million, National said it lost $40 million, or 24 cents per share, during its fiscal fourth quarter, compared with a loss before charges of $69.3 million, or 42 cents per share, a year ago.

The Santa Clara, Calif., chip maker's revenue also declined during the quarter, falling to $477 million from $510 million a year ago. Brian Halla, National's chairman, president, and chief executive, attributed virtually all of the quarter's losses to the company's PC-processor business.

Last month, National said it would exit that business, which it entered in 1997 with its $550 million acquisition of Cyrix. The company instead will focus on its system-on-a-chip and embedded chip strategy, as well as its core analog IC business, which Halla said is beginning to strengthen.

"Our robust on-going analog business continues to show evidence of a broad-based recovery in the semiconductor marketplace," he said in a prepared statement.

National reported its bookings during the quarter rose 17 per cent sequentially and 23 percent year-over-year. Excluding Cyrix PC processor orders, new bookings rose 21% from the third quarter and 26 percent from a year ago.

Halla also said the company was making headway into the emerging market for "information appliances," which have been a pivotal element in the company's overall product strategy since he took the helm three years ago. Since then, Halla has been positioning the company to take advantage of what he anticipates will be a thriving market for highly integrated chips that combine analog and digital circuits on a single piece of silicon.

"The information appliance market is now becoming a reality for us," Halla said. "In May we booked the first material orders from Philips for the set-top box that AOL will offer for `AOL TV' Web browsing, and also announced our agreement to collaborate with Acer to develop additional set-top box applications," he said.

With the divestiture of the PC-processor business underway, the firming in the analog market, and an improved outlook for information appliance applications, Halla said National could regain profitability within the next two quarters. "We are now on track to be profitable in the November quarter," he said.