National Semiconductor (NYSE: NSM) slipped 48 U.S. cents to $24.52 in morning trading Wednesday, after the chipmakerlowered its outlook for the fourth quarter ending May 27th and said it willcut jobs amid weak demand for its products.
The Santa Clara, California-based company said sales for the quarterwill likely total $390 million to $400 million, 16 to 18 percent below third-quarter levels.
“Market conditions for National’s customers are impacting orders and shipments in the fourth quarter,” National Semiconductor said. “Sales are also being affected by lower than expected (same-quarter) orders, continued high inventory levels and manufacturing consolidations in the cell phone handset market, andweakness in the broad analog market through the distribution channel.”
The pro forma loss — before charges for cost cuts and investmentwritedowns — will fall between breakeven and 4 cents per share. Results forthe quarter will also include $25 million to $30 million for a cost-cuttingprogram and $10 million to $12 million for investment writedowns.
The cost-reduction program, aimed at saving $70 million to $80 million ayear, includes the elimination of about 1,100 jobs, or 10 percent of thecompany’s workforce. Eight hundred of the jobs are full-time and 128 willbe contractors.
The cuts will be made through a combination of layoffs,attrition and retirement, the company said.
Chairman, president and chief executive officer Brian L. Halla said the cutsare necessary because of “continuing weakness in the marketplace.”
National plans to report fourth-quarter results on June 7th.