LSI Corp. Beats Easily - Analyst Blog
April 28 2011 - 11:49AM
Zacks
LSI Corporation (LSI) generated revenues of
$473 million from continuing operations in the first quarter of
2011, flat year over year and up 0.4% sequentially.
On March 9, LSI entered into a definitive agreement to sell its
external storage systems business to NetApp, Inc. The transaction
will be completed in May.
Including operations from the storage systems, LSI generated
revenues of $629 million, down 1% year over year and down 5.3%
sequentially, beating the Zacks Consensus Estimate of $622
million.
Server and storage semiconductor revenues (accounting for 71% of
total revenues), which include hard disk drive silicon, SAS
standard components, RAID storage adapters and software and storage
area network ICs grew 3% sequentially to $336 million.
In Server RAID adapters, LSI Corp continues to grow its business
at key OEMs such as International Business
Machines (IBM), Cisco Systems (CSCO),
Oracle (ORCL), Dell Inc. (DELL)
and NEC as well as the channel.
Revenues from networking business (accounting for 24% of total
revenues) were down 5.7% sequentially to $112 million. Revenues for
the IT business were sequentially flat at $25 million.
Gross margin (excluding special items) came in at 52.4%, up from
48% in the fourth quarter. Operating margin came in at 12.0%.
During the quarter, LSI Corp generated $108 million of cash from
operating activities. After repurchasing shares worth $97 million,
LSI Corp ended the March quarter with cash and equivalents of
$682.3 million, up from $676.6 million at the end of the previous
quarter.
Going forward, management expects revenues between $465 million
and $495 million in the second quarter of 2011. Revenues from
server and storage semiconductor business are projected to be
sequentially up in Q2. LSI Corp expects strong sequential growth
from networking business in the second quarter. Gross margin is
projected between 52% and 54%.
Net income from continuing operations came in at $19 million or
3 cents per share compared to net income of $14
million or 2 cents per share in the year-ago quarter and net income of $5
million or 1 cent per share in the previous quarter.
Excluding one-time items, net income per share from continuing
operations came in at 8 cents, in line with the Zacks Consensus
Estimate.
The positive results and guidance boosted the stock price which
gained 5.80% in after-hours trading to close at $7.30.
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
DELL INC (DELL): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
LSI CORP (LSI): Free Stock Analysis Report
ORACLE CORP (ORCL): Free Stock Analysis Report
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