National Semiconductor Cuts Loss in Latest Quarter
National Semiconductor lost $1.4 million in the quarter ended Sept. 21, the company said Thursday, marking its sixth consecutive quarterly loss.
But the Santa Clara, Calif.-based chip maker also reported its first year-to-year sales gain since early 1985, showed its second consecutive quarterly operating profit and said its semiconductor unit was nearing the break-even level. Those improvements are slight but heartily welcome relief for the company, which has sustained losses of more than $95 million during the lingering semiconductor industry recession.
National Semi said its loss for the first three months of fiscal 1987 compared to a loss of $57.9 million in the year-ago quarter.
The company said its sales during the quarter were $501.1 million, a 22.5% increase from revenue of $408.8 million posted for the like quarter last year. It was the first time that sales increased from the year-earlier period since the third quarter of 1985, which ended March 3 of that year. That also was the company’s last profitable quarter.
“Semiconductor order rates during the summer were below the levels experienced in the spring. . . . However, we continue to expect an improvement in (the) order rates in calendar year 1987,” Charles E. Sporck, president and chief executive, said in a statement.
Throughout the industry, order rates improved early in the spring, prompting some industry analysts to predict the long-awaited rebound. However, demand fell back and has remained sluggish.
“We’ve thought several times the turning point was coming,” a National Semi spokeswoman said, “but the turning point really comes when our customers’ purchases are in line with their usage and our customers need to see an upturn in their business.”
Some areas of the industry are expected to pick up somewhat later this month as a belated effect of the U.S.-Japanese trade agreement on chips. But National, whose product lines are little affected by the pact, still looks for only “modest improvement” in orders during this current quarter.
The company recently ordered shutdowns of 14 days for several of its plants between now and the end of the year. Other areas of National Semi’s business are healthy, however. Its Information Systems Group, which includes the National Advanced Systems and Datachecker Systems units, reported record sales for the quarter.
The company’s financial reports reflect an accounting change implemented in the quarter ended in June. Sales and earnings reported for the year-ago quarter have been restated to reflect that change. Originally, sales a year earlier were posted at $423.2 million, and the loss was $53.5 million. In addition, cumulative effects of the accounting change for previous years were recognized in that year-ago quarter, making the net loss $6.7 million.
