It's a fresh start to the new fiscal year for National Semiconductor (NYSE:NSM) when it reports first-quarter 2008 earnings on Thursday night. Is this stock all-that-and-a-bag-of-chips, or is it just living a semi-charmed life? Let's tune in to the pulse of the nation and find out. Motley Fool CAPS -- the Michelin guide of the stock market -- gives it three stars out of five based on reviews from 128 of your fellow investors.

What analysts say:

  • Buy, sell, or waffle? Twenty-two analysts follow National Semi, with 12 buy ratings and 10 holds between them.
  • Revenues. $467 million would slake the sales thirst of your average analyst. That'd be 13.7% below the $541 million seen a year ago, although it's up a tad from $456 million last quarter.
  • Earnings. Wall Street is looking for about $0.25 per share, down from $0.35 per share last year.

What management says:
In the last earnings report, CEO Brian Halla told us that the record gross margin came from a fatter product mix, selling high-end analog chips to makers of consumer electronics and mobile gadgetry. He also expects that margin trend to continue into this quarter, which could be a good sign for the semi industry as a whole. Maybe we're done with the consumer focus on low-end cell phones, at long last.

What management does:
The first half of calendar year 2006 was very good to National, but then that market shift happened in the cell phone sector, and things have been going downhill ever since. But even in a weak market, National has remained solidly profitable with a large base of dependable orders even as the total revenue volume went down.

Margins

2/2006

5/2006

8/2006

11/2006

2/2007

5/2007

Gross

57.3%

59%

60.4%

61.1%

61.3%

61.8%

Operating

28.9%

32.2%

33.5%

33.6%

32.3%

31.7%

Net

22.4%

20.8%

21.9%

21.3%

19.7%

19.4%

YOY Growth

2/2006

5/2006

8/2006

11/2006

2/2007

5/2007

Revenue

1.7%

12.8%

18.7%

10.7%

(0.3%)

(10.6%)

Earnings

21.4%

8.2%

26.2%

12.9%

(12.3%)

(16.5%)
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:
Much like  IBM (NYSE:IBM), National borrowed a chunk of change over the summer just to repurchase a few billion dollars' worth of its own stock. In this case, it was a $1.5 billion term loan from Goldman Sachs that got sunk into the market again under a $2 billion repurchase plan expansion. Did someone say there was a credit crunch going on? These guys seem to be doing their parts to ensure a liquid market, at least.

And as I said before, that borrow-and-repurchase move is either a really bullish sign as management sees a serious discount to the company's true value, or a really stupid sign if that estimate is completely off base. Because we're talking about a large and well-established company with proven management and a distinguished board of directors, I'd bet on the first option. That board includes the CEO of Micron (NYSE:MU) and a top advisor to President Bill Clinton, among other dignitaries and luminaries.

The last earnings report was cheery enough to shoot the stock price up 15% overnight, although the market doldrums of the last three months have brought it back to where it was before that event, more or less. Also, the S&P 100 index kicked National out recently to be replaced by Tyco (NYSE:TYC) spinoff Covidien (NYSE:COV), and although that index is less widely used than the S&P 500, it never helps to lose a status symbol like that.

National is doing well, but it's getting dragged down by a crummy overall market. Other semiconductor designers likeTexas Instruments (NYSE:TXN) andAnalog Devices (NYSE:ADI) have reported a mixed bag of results over the last couple of months, making it harder to get a read on where National will land.

Covidien and Tyco are Motley Fool Inside Value picks, even after the conglomerate breakup. Read all about it with a free 30-day trial pass to our value-hunting newsletter service.

Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and the Foolish disclosure is the prognosticator of prognosticators.