Nat'l Semi issues warning
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February 2, 1998: 8:32 a.m. ET
Semiconductor maker is latest victim of reduced chip demand from Asia
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NEW YORK (CNNfn) - The glut of computer chips enveloped its latest victim Monday as National Semiconductor Corp. said its quarterly results will be lower than expected.
National Semiconductor (NSM) said earnings and sales for the fiscal third quarter, which ends March 1, will decline from the second quarter's results. During that quarter, National Semiconductor earned $72.5 million, or 46 cents a share.
First Call's consensus of analysts' estimates predicted earnings of 39 cents per share for the current quarter.
During the fiscal third quarter of last year, the company earned $42 million, or 30 cents a share, on sales of $680.5 million.
Computer chip makers like National Semiconductor have seen profits dwindle as demand from Southeast Asia has decreased due to that region's current economic slowdown. The lower demand has backed up inventories and led to sharp price cutting among chip companies.
Indeed, National Semiconductor blamed "uncertainties" within the Asia-Pacific markets for its current troubles. Specifically, the company said reduced demand from South Korea played a major factor in the weaker results.
National Semiconductor also cited its $550 million acquisition of another chip maker, Cyrix Corp., as affecting earnings. The company said sales at Cyrix have declined during the third quarter.
In addition, National Semiconductor said it has seen slowing demand for its wireless products from portable phone makers in Asia.
National Semiconductor predicted shipments will return to more normal levels in the fiscal fourth quarter.
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