National Semiconductor Reports Results for First Quarter Fiscal 2011

First quarter net income of $88.8 million, or 36 cents per diluted share, was an increase from the $79.2 million, or 33 cents per diluted share, in the fourth quarter of fiscal 2010. National reported net income of $29.8 million, or 13 cents per diluted share, in the first quarter of fiscal 2010.

First quarter gross margin of 70.9 percent set a new record for the company, driven by improved manufacturing cost efficiencies from higher capacity utilization and benefits from manufacturing consolidation completed in the fourth quarter of fiscal 2010. National reported gross margin of 68.8 percent in the fourth quarter of fiscal 2010 and 61.1 percent in the first quarter of fiscal 2010.

“Our business model is working well with another quarter of revenue growth, 70 percent gross margins and over 36 percent operating margins,” said Don Macleod, National’s chairman and chief executive officer. “However, in the near term, slower growth in our end markets and distribution channel, along with some likely inventory reduction, will mute the seasonal growth that we would normally see in our business during this time of the year.”

Bookings for Q1, Fiscal 2011
In the first quarter of fiscal 2011, National’s total company bookings decreased 10 percent sequentially, primarily from the company’s distribution channel. However, order rates improved slightly in the quarter for analog and power management products for the personal mobile device and communications infrastructure markets.

Notable Items in Q1
First quarter fiscal 2011 results included a $9.8 million pre-tax restructuring charge related to process transfers and shutdown activity for a previously announced manufacturing consolidation.

Outlook for Q2, Fiscal 2011
For the second quarter of fiscal 2011, National projects revenues to be between $390 million to $415 million, or flat to a decrease of 5 percent, compared to the first quarter of fiscal 2011.