On Sept. 6, broad-line semiconductor maker National Semiconductor (NYSE:NSM) released first-quarter 2008 earnings for the period ending Aug. 26, 2007.
- Sales are down significantly from last year because of a challenging year for cell phone manufacturers. Shareholders of other component suppliers such as Texas Instruments (NYSE:TXN) and Analog Devices (NYSE:ADI) would be quick to concur on that point.
- On the other hand, revenue did tick up 3.4% from last quarter despite the seasonally slow summer business. Over the past 10 years, National's first-quarter sales have been lower than the preceding quarter's more often than not. (Source: Capital IQ, looking at income data over time.)
- It's the second-fattest gross margin in the company's recorded history -- after Q4 2007.
- National took on $1.5 billion of new debt to finance some of its share buyback program. The company has some recent and illustrious company in this practice.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Q1 2008 |
Q1 2007 |
Change | |
|---|---|---|---|
|
Sales |
$472 |
$541 |
(12.9%) |
|
Net Profit |
$86 |
$120 |
(28.7%) |
|
EPS |
$0.30 |
$0.35 |
(14.3%) |
|
Diluted Shares |
283.9 |
343.7 |
(17.4%) |
Get back to basics with the income statement.
Margin Checkup
|
Q1 2008 |
Q1 2007 |
Change* | |
|---|---|---|---|
|
Gross Margin |
63% |
61.8% |
1.2 |
|
Operating Margin |
28% |
30.6% |
(2.5) |
|
Net Margin |
18.2% |
22.2% |
(4.0) |
Margins are the earnings engine.
Balance Sheet Highlights
|
Assets |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$962 |
$840 |
14.5% |
|
Accounts Rec. |
$176 |
$196 |
(10.1%) |
|
Inventory |
$166 |
$196 |
(15.4%) |
|
Liabilities |
Q1 2008 |
Q1 2007 |
Change |
|---|---|---|---|
|
Accounts Payable |
$58 |
$82 |
(29.2%) |
|
Long-Term Debt |
$1,520 |
$0.2 |
7,599% |
The balance sheet reflects the company's health.
Cash Flow Highlights
|
Q1 2008 |
Q1 2007 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$126 |
$133 |
(5.2%) |
|
Capital Expenditures |
$24 |
$41 |
(41.4%) |
|
Free Cash Flow |
$102 |
$92 |
10.8% |
|
$91 |
$119 |
(23.5%) |
Free cash flow is a Fool's best friend.
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