Thursday evening, we get yet another semiconductor earnings report, as National Semiconductor (NYSE:NSM) shows us the goods for its fourth quarter and full fiscal year.

What analysts say:

  • Buy, sell, or waffle? Twenty-four analysts follow the company, and their recommendations are split 14 to 10 between buy and hold. In our Motley Fool CAPS database, this is a jittery three-star stock, based on more than a hundred user ratings.
  • Revenue. Management guidance tells us to expect $444 million to $459 million, down from $573 million a year ago but better than last quarter's $431 million. The consensus Wall Street estimate says $451 million.
  • Earnings. The average forecast calls for $0.23 of earnings per share, down from $0.41 last year. National Semiconductor doesn't provide earnings guidance.

What management says:
CEO Brian Halla noted rising order volumes in the latest earnings report and said that the "inventory correction" at large customers like Nokia (NYSE:NOK), Ericsson (NASDAQ:ERIC), and Motorola (NYSE:MOT) may be behind it. If so, revenue should rise once again.

What management does:
Rising gross margin is quite a feat in the ailing semiconductor industry these days, and that extra cash stays fairly intact down to the operational line. However, keep in mind that last quarter's net revenue dropped 21% year over year, so in straight dollars rather than percentages, the story sounds a bit grimmer.

On the bright side of that dark side, the margin trend shows a disciplined sales approach, because management isn't willing to bury its bottom line to land a few extra sales. Quality over quantity.

Margin

11/05

2/06

5/06

8/06

11/06

2/07

Gross

55.3%

57.3%

59.0%

60.4%

61.1%

61.3%

Operating

25.8%

28.9%

31.5%

33.5%

33.6%

32.3%

Net

20.9%

22.4%

20.8%

21.9%

21.3%

19.7%
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
After meekly positive reports from peers like Texas Instruments (NYSE:TXN) and Analog Devices (NYSE:ADI), as well as mildly optimistic reports from equipment suppliers, it would rock to see an unabashed success story. This consumer gadget slump has been dragging down the semiconductor industry long enough already.

As always, the proof is in the tapioca. The news out of National Semiconductor's Santa Clara, Calif., headquarters has stayed upbeat, with a couple of announcements about new products thrown in for good measure. The faster we all convert to high-definition television sets, the happier National Semi's management becomes. In any case, this company likes to give out conservative, beatable guidance, and this report should be no different. I'd love some fireworks, but would settle for a solid return to growth.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will help you find the road ahead.