LSI: Fiscal 3Q08 Financial Results

 

LSI Corporation reported results for its third quarter ended September 28, 2008.

Third Quarter News Release Summary

• Third quarter 2008 revenues of $714 million
• Third quarter 2008 GAAP net income of 2 cents per share
• Third quarter 2008 non-GAAP net income of 14 cents per diluted share
• Third quarter operating cash flows of $56 million
• Cash and short-term investments of $1.2 billion

Fourth Quarter 2008 Business Outlook

• Projected revenues of $670 million to $710 million
• GAAP net (loss)/income in the range of ($0.07) to $0.03 per share
• Non-GAAP net income in the range of 8 to 14 cents per diluted share

Growth in Storage Semiconductors Drives Solid Quarterly Results

Third quarter 2008 revenues were $714 million, a 2% decrease year-over-year compared to $727 million reported in the third quarter of 2007, and up 3% sequentially compared to $692 million reported in the second quarter of 2008. Adjusting for the sale of the consumer and mobility businesses, third quarter revenues increased 14% year-over-year compared to the third quarter of 2007.

Third quarter 2008 GAAP net income was $11 million or 2 cents per diluted share, compared to third quarter 2007 GAAP net loss of $141 million or 20 cents per share. Third quarter 2008 GAAP results compare to second quarter 2008 GAAP net loss of $14 million or 2 cents per share. Third quarter 2008 GAAP net income included a net charge of $83 million from special items, consisting primarily of $60.5 million of amortization of acquisition-related items, $16.9 million of stock-based compensation expense, $1.7 million in write-down of investments, and $1.6 million in net restructuring and other items.

Third quarter 2008 non-GAAP net income was $94 million or 14 cents per diluted share, compared to third quarter 2007 non-GAAP net income of $44 million or 6 cents per share. Second quarter 2008 non-GAAP net income was $83 million or 13 cents per diluted share.

Cash and short-term investments totaled approximately $1.2 billion at quarter end.

"Healthy demand in the quarter for our HDD and SAN semiconductors provided a foundation for delivering solid results," said Abhi Talwalkar, LSI president and chief executive officer. "We are also pleased by our progress in securing new opportunities, with recently announced Tier 1 OEM wins for next-generation HDD, SSD and 6Gb/s SAS products. Although fourth quarter visibility is limited, we are confident that our strategic focus, continuing design win momentum and strong financial position leave us well positioned for the foreseeable future."

Bryon Look, LSI chief financial officer, said: "Significantly higher gross margins and continued focus on cost control contributed to third quarter EPS near the high end of our guidance range. Compared to the same quarter in 2007 we have grown revenue in our core businesses by 14% while significantly reducing quarterly operating expenses."

To read the conference call transcript