Analyst Romit Shah says the company's second-quarter forecast was sharply lower, as turns did not pick up during the November quarter. He notes the preannouncement follows the Oct. 6 update in which he highlighted looming estimates were reset as bookings were subdued, visibility limited, and inventories were still elevated.
Shah says that despite a sharp estimates revision, he believes a downside still exists. He cuts 21 cents second-quarter earnings-per-share estimate to 15 cents, and $499 million in revenues to $447 million. He also cuts $1.00 fiscal 2005 (May) to 85 cents, and $2.1 billion in revenue to $2.03 billion.
While the product mix is better this cycle, he believes manufacturing and supply-chain management remain key issues at National Semiconductor. He keeps his equal-weight rating and $15 target.