San Francisco, Aug 20: Three computer chip makers said that their upcoming earnings would show the effects of an industry-wide slump. Shares of LSI Logic Inc and Analogue Devices Inc tumbled on warnings they expected disappointing earnings, and National Semiconductor Corp announced after the market closed that it too was feeling the weight of weak semiconductor demand."Although new order rates for the current quarter indicate an improvement over the fourth quarter, shipments in the current quarter have been impacted by weakness in overall semiconductor demand, including the personal computer market," National Semiconductor said in a statement.
National Semi said it expected to show a first-quarter loss and a decline in sales. LSI and Analogue Devices issued similar warnings.
Milpitas, Calif.-based LSI, which makes customised high-performance chips and system-on-a-chip devices, warned of lower-than-expected third-quarter earnings, citing sluggish sales in the United States as a contributing factor.
LSI said its third-quarter revenues would be five per cent to 10 per cent below the $330 million in revenues it reported in the second quarter and that earnings would be 10 per cent to 15 per cent below the second quarter's 23 cents a share.
LSI's latest warning comes less than a month after the company forecast third-quarter revenues and earnings would be flat compared with the second quarter.
Analogue Devices of Norwood, Mass. reported weaker-than-expected third-quarter earnings, blaming weak market conditions in Southeast Asia and Japan.
Analogue Devices reported a seven per cent drop in third-quarter revenues to $295 million versus $318 million a year ago, and diluted earnings of 15 cents a share, excluding a restructuring charge and an equity loss, versus 27 cents a year ago.
That fell below the Wall Street consensus forecast of 19 cents a share, according to First Call Corp., which tracks analyst estimates.
Shares of Analogue Devices, which makes high performance analogue chips, were off $2.625 at $21.625 in active composite afternoon New York Stock Exchange trading.
Analogue Devices also said it expects its fourth-quarter revenues to be flat with the third quarter and it plans to continue to cut expenses further.
LSI Logic tumbled $2.19 to $16.06. Traders said analysts were cutting earnings estimates for both companies.
"It (LSI) was mostly US-driven, US (Order) bookings were the major shortfall," said Dan Niles, a BancAmerica Robertson Stephens analyst. "It's really broad-based, you cannot point to one single customer."
LSI Chairman Wilfred Corrigan said in a statement the slowdown of the global semiconductor industry is now completing its third year, which is the longest slow period ever experienced in the industry. But Corrigan added he believes supply and demand will come together within the next 12 months.
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