LSI Corp.'s (LSI) third-quarter profit surged as a $65 million
tax benefit masked lower sales and margins. The storage-chip maker
posted a rare profit and better-than-expected results.
The company 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.
Last year, semiconductor sales fell for the first time since 2001,
when the Internet bubble burst, but semiconductor shipments are
getting a boost from customers' replenishing inventories.
On Wednesday, Chief Executive Abhi Talwalkar said the revenue
exceeded guidance due to strong sequential growth across all of the
company's businesses.
LSI posted a profit of $52.5 million, or 8 cents a share, up
from $11.4 million, or 2 cents a share, a year earlier. Excluding
the tax benefit and other items, earnings rose to 18 cents from 14
cents. Revenue dropped 19% to $578.4 million.
In July, the company said it expected earnings to be as much as
6 cents on revenue of $520 million to $570 million.
Gross margin slid to 45.5% from 48.3%, but was above LSI's
forecast of 34% to 39%.
LSI expects fourth-quarter earnings of 7 cents to 13 cents on
revenue of $605 million to $645 million.
Analysts polled by Thomson Reuters expected 6 cents and $587
million, respectively. The company also affirmed its
capital-spending target for the year.
Shares were down 0.2% at $4.98 in after-hours trading. The stock
has grown by about half this year.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com