On March 8, broad-line semiconductor designer National Semiconductor
- Revenues came in at the top end of management's lowered expectations.
- Margins, returns, and sales are all down, and it's hard to find any positive signs in any of these numbers. The exception might be free cash flow and owner earnings, where National held up pretty well, considering the lower gross revenues.
- CEO Brian Halla thinks the market is starting to rebound from a mid-January bottom. That does jibe fairly well with what Analog Devices
(NYSE:ADI) told us a couple of weeks ago; now, all eyes turn to next week's mid-quarter update from Texas Instruments(NYSE:TXN) . Is the semiconductor sector on the upswing?
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q3 2007 |
Q3 2006 |
Change |
|
|---|---|---|---|
|
Sales |
$431.0 |
$547.7 |
(21.3%) |
|
Net Profit |
$71.5 |
$130.1 |
(45.0%) |
|
EPS |
$0.22 |
$0.37 |
(40.5%) |
|
Diluted Shares |
330.1 |
354.6 |
(6.9%) |
Get back to basics with the income statement.
Margin Checkup
|
Q3 2007 |
Q3 2006 |
Change* |
|
|---|---|---|---|
|
Gross Margin |
59.8% |
60.7% |
(0.9) |
|
Operating Margin |
19.9% |
33.2% |
(13.3) |
|
Net Margin |
16.6% |
23.8% |
(7.2) |
Margins are the earnings engine.
Management Effectiveness
|
Q3 2007 |
Q3 2006 |
Change* |
|
|---|---|---|---|
|
Return On Assets |
12.9% |
21.1% |
(8.2) |
|
Return On Equity |
16.4% |
27.2% |
(10.8) |
See how well management puts the company's resources to work.
Balance Sheet Highlights
|
Assets |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$777.7 |
$1,008.4 |
(22.9%) |
|
Accounts Rec. |
$172.4 |
$187.8 |
(8.2%) |
|
Inventory |
$171.9 |
$179.7 |
(4.3%) |
|
Liabilities |
Q3 2007 |
Q3 2006 |
Change |
|---|---|---|---|
|
Accounts Payable |
$63.7 |
$93.3 |
(31.7%) |
|
Long-Term Debt |
$20.6 |
$21.1 |
(2.4%) |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q3 2007 |
Q3 2006 |
Change |
|
|---|---|---|---|
|
Cash From Ops. |
$170.0 |
$201.8 |
(15.8%) |
|
Capital Expenditures |
$23.0 |
$53.6 |
(57.1%) |
|
Free Cash Flow |
$147.0 |
$148.2 |
(0.8%) |
|
$84.4 |
$88.8 |
(5.0%) |
Free cash flow is a Fool's best friend.
Related Foolishness:
- Foolish Forecast: Gloomy National Semi
- Texas Instruments' Surprising Move
- Analog Devices' Sweet Smell of Success
- Foolish Fundamentals: Free Cash Flow
Check out what your fellow investors think about semiconductor stocks. All you need is a free all-access account with our new Motley Fool CAPS investor community.
Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.
At the time of publication, Anders Bylund had no position in any company mentioned. Fool rules are here.
