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National Semiconductor Q1 Profit Beats View, but Weak Forecast Sends Shares Plunging (NSM)

Posted: 9/10/2010 8:42:00 AM
Referenced Stocks: NSM

Microchip maker National Semiconductor Corporation ( NSM ) late Thursday said its fiscal first quarter profit nearly tripled from last year, but its sluggish sales forecast sent its shares lower in premarket trading Friday..

The Santa Clara-based company reported fiscal first quarter net income of $89 million, or 36 cents per share, compared with just $30 million in the year-ago period.

Revenue surged 31% from last year, to $412 million.

On average, Wall Street analysts expected a smaller profit of 34 cents per share, albeit on higher revenue of $415 million.

Looking ahead, the company said it expected second quarter sales to be flat to down 5% from the first quarter.

National Semiconductor shares fell 75 cents, or -5.8%, in premarket trading Friday.

The Bottom Line
We have avoided shares of NSM since our early June 2008 coverage began, when the stock traded at $23.74. The company has a 3.10% dividend yield, based on last night's closing stock price of $12.90. The stock has technical support in the $10 price area. If the shares can rebound, we see overhead resistance around the $14-$15 price levels. We would remain on the sidelines for now.

National Semiconductor Corporation ( NSM ) is not recommended at this time, holding a DARS™ Rating of 3.2 out of 5 stars.

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