National Semi Tops Street, Sees Sales Growth

National Semiconductor swung to a profit in its fiscal fourth quarter, boosted by healthy chip sales to industrial and wireless handset customers, and delivered a forecast above Wall Street estimates.

The results represented the latest indication that business in the highly-cyclical chip industry remains on track, despite investor concerns.

On Tuesday, chipmaker Texas Instruments [TXN  24.53  0.79  (+3.33%)   ] provided a mid-quarter update in which it said profit and revenue would be at the high-end of its previous forecast thanks to strong demand for chips from industrial customers.

National Semiconductor said that orders for chips exceeded billings during the fiscal fourth quarter—a sign of healthy future demand—with bookings coming from both hardware vendors and distributor customers in all regions, particularly Europe.

Semiconductor stocks have been under pressure in recent months, as investor fret about a potential build-up in chip inventories industry-wide, as well as concerns about effect of the European debt crisis.

“Like all of you I have my antenna raised for any signs of slowdown,” Chief Executive Don Macleod said during a conference call with analysts on Thursday.

“At this time our indicators point to a continuation of revenue growth over the summer,” he said.

The Santa Clara, California chipmaker said revenue in the three months ended May 30 totaled $398.5 million, up 42 percent year-over-year and above the average analyst expectation of $384.1 million according to Thomson Reuters.

The company said that improvements in manufacturing efficiencies and utilization at its factories bumped gross profit margin up to 68.8 percent, from 67.3 percent in the fiscal third quarter.

National Semiconductor reported a net profit of $79.2 million, or 33 cents a share, in the fiscal fourth quarter, beating the 28 cents in earnings per share expected by analysts.

In the year-earlier period, National Semiconductor reported a net loss of $63.7 million, or 28 cents a share, when the company incurred $116 million in restructuring charges.

The company said it expects revenue of $410 million to $418 million in its fiscal first quarter. Analysts expected first-quarter revenue of $390.8 million.

In recent years, National Semiconductor has reorganized its business to focus on high-profit analog chips that control power management in electronic devices, shedding various business lines. The company’s gross margin has jumped from 59 percent of revenue in 2006 to 65.9 percent in its just-completed fiscal 2010 year.

But National Semiconductor’s revenue has moved in the opposite direction, declining roughly 34 percent since 2006.

National Semiconductor shares [NSM  13.53  0.42  (+3.2%)   ], which are down roughly 14.5 percent this year, rose 1.3 percent, or 17 cents, to $13.70 in after hours trading. Track National Semiconductor’s after-hour quotes here.