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Asia strikes Nat Semi

National Semiconductor Corp. (NSM) on Thursday disappointed analysts in its third quarter, returning a profit of $26.
Written by Larry Barrett, Contributor

National Semiconductor Corp. (NSM) on Thursday disappointed analysts in its third quarter, returning a profit of $26.2 million, or 16 cents per share, on sales of more than $650 million.

First Call consensus expected the Santa Clara, Calif.-based firm to report a profit of 18 cents per share in the quarter, though "whisper" numbers circulating Wall Street Wednesday afternoon had the chip maker reporting a profit between 15 cents to 19 cents per share.

Analysts said National's third quarter results would be the first real indicator of how American hardware manufacturers would do following the economic turmoil and extreme currency fluctuations in Asia.

"It's not terribly surprising," said Rob Chaplinsky, an analyst at Hambrecht & Quist. "They said Asia was going to be a problem and everyone sort of excepted it. Maybe some people didn't really want to believe it."

Company officials blamed problems in Asia for the third-quarter shortfall and also for an expected loss in the company's fourth quarter.

National's third quarter earnings were off slightly from the $28.7 million, or 18 cents per share, reported in the year-ago period. The quarter also included a $5.2 million charge related to the acquisition of audio compression technology from Gulbransen. Including that charge, National only made $22.3 million, or 13 cents per share.

National's stock closed up 50 cents per share to $21.25 prior to the earnings announcement. The stock has depreciated by more than 33 percent since March 1997.

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