DOW JONES NEWSWIRES
LSI Corp.'s (LSI) second-quarter loss widened on lower sales and
margins, continuing a trend of red ink for the company, which has
had only one profitable quarter in the past two years.
Shares fell 1% to $5.15 in after-hours trading as the
storage-chip provider projected current-quarter revenue below
analysts' expectations. The stock has more than doubled from a
16-year low in November but is still down about a third from last
August.
LSI expects third-quarter earnings of as much as 6 cents a share
on revenue of $520 million to $530 million. Analysts' average
estimates were a 1-cent profit and revenue of $537.8 million,
according to a poll by Thomson Reuters. The company also lowered
its capital-spending target for the year 10% to $45 million.
LSI is expected to show solid growth in the next few years on
new products, including "system-on-a-chip" combination devices for
hard drives and high-performance communications chips. Under Chief
Executive Abhi Talwalkar, the company has been restructured from
one with expensive fabrication plants making consumer products to a
"fabless" chip supplier that outsources manufacturing and focuses
on business customers.
For the latest quarter, LSI reported a loss of $61.5 million, or
9 cents a share, compared with a year-earlier loss of $13.6
million, or 2 cents a share. Excluding acquisition and other costs,
earnings fell to 1 cent from 13 cents.
Revenue dropped 25% to $520.7 million.
In April, LSI forecast earnings of as much as 1 cent a share on
revenue of $470 million to $530 million.
Gross margin fell to 34.7% from 41.2%, in line with LSI's
forecast of 33% to 37%. Meanwhile, inventory decreased 21% during
the quarter.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
Kathy.Shwiff@dowjones.com