) generated revenues of $622 million in the first quarter of 2012,
up 30.0% year over year and up 19.0% sequentially and surpassed
management's revised guidance of $585 million and $685
The growth in revenues was driven by a snapback in HDD business,
better-than-expected strength in its newly acquired SandForce flash
business and growth in networking investment areas.
On May 6, 2011, LSI completed the sale of its external
storage systems business to
). The financial results of the external systems business have been
classified as discontinued operations.
With the divestiture of storage systems business, LSI has
transformed itself into a pure play storage and networking
The company recently acquired SandForce, which should enable the
company to benefit from the growing adoption of solid-state drives
and flash storage solutions.
SandForce is a leading provider of flash storage processors for
enterprise and client flash solutions and solid state drives
Server and storage semiconductor revenues (accounting for 78% of
total revenue), which include products from ServeRAID adapter and
software, Flash, SAS, SAN and HDD businesses, were sequentially up
26% to $488 million.
Revenues from the networking business (accounting for 17% of
total revenue) were flat sequentially at $107 million due to
declines in legacy products.
Revenues for the IP business were $27 million.
Gross margin (excluding special items) came in at 52.4%, up from
49.5% in the previous quarter primarily due to the recovery from
the floods in Thailand, which impacted results in the last quarter
along with improved absorption of fixed costs.
Operating margin came in at 16.4%, up from 10.7% in the previous
Net income from continuing operations came in at $75.2 million
or $0.13 per diluted share compared to a net income of $11.4
million or $0.02 per diluted share in the previous quarter compared
to a net income of $18.6 million or $0.03 per diluted share in
the year-ago quarter.
Excluding one-time items but including stock-based compensation,
net income per share came in at $0.15, easily beating the Zacks
Consensus Estimate of $0.11.
During the quarter, LSI Corp. generated $50.2 million of cash
from operating activities and used $64.9 million in capital
expenditures. The company repurchased 5 million shares for
approximately $38 million in the first quarter under its $750
million authorized buy-back program. The company still has
approximately $213 million remaining in its authorized buy-back
LSI Corp. ended the quarter with cash and short-term investments
of $623.1 million, down from $935.5 million at the end of the
previous quarter primarily due to the SandForce acquisition.
Going forward, management expects revenues between $630 million
and $670 million in the second quarter of 2012.
LSI Corp expects server and storage semiconductor revenues to be
sequentially up while networking semiconductor revenues is expected
to be roughly flat.
Gross margin is projected around 53%, (+/-1%). Operating margin
is expected at 17.5%, above the company's prior business model of
17% and towards the long-term target of 20% - 22%. Net income from
continuing operations is forecasted to come around $0.03 - $0.13.
Excluding one-time items, income from continuing operations came in
at $0.15 to 0.21.
The better-than-expected results and upbeat guidance drove a
4.51% increase in the share price in after-market trading to close
at $8.81. The stock earlier gained 4.98% to close at $8.43 in
LSI CORP (
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