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InvestorGuide Stock Analysis

National Semiconductor Giving the Pink Slip to 26% of Workforce
Excerpt from the InvestorGuide.com Stock of the Day on 3/11/2009

Despite beating analyst expectations for their recent 3Q, National Semiconductor stated this morning they would be cutting 1,750 jobs as well. This is about 26 percent of the company's workforce. The cuts themselves will come about in two ways. First, 850 people will be released effective immediately, and over several quarters, two plants will then be closed, forcing another 875 jobs to be lost. The company is expected to take charges of $160-180 million because of this. Shares of the company's stock rose to about $12 per share in Wednesday's early trading session, indicating investors believe the company is making the right decision. After markets were open however, shares steadily declined. Following Tuesday's market rally after Citigroup (C: Charts, News, Offers) announced that last the two months were profitable, pundits are claiming a few consecutive sessions of solid gains can restore the economy. If this is the case, could National Semiconductor's actions be a bit too hasty?

Probably not. A few strong days of rallies will be insufficient in stimulating demand in the tech industry, much less in the company. Though they were able to make a profit of $21.1 million for the quarter, sales for the company fell by as much as 36 percent in this last quarter. The decline seems logical considering the fewer individuals are purchasing consumer electronics like digital cameras or mp3 players. The company's chips are also used in cell phones, cars, and even some aerospace products, which may serve to explain why they were able to generate a profit. As a result of the job cuts however, the company is expecting future sales to fall by 5-10 percent. Wall Street, however, is expecting earnings to be flat. More >

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Morningstar Analysis for National Semiconductor

National Semiconductor (NSM) Upgrades

Date
Analyst
Old Rating
New Rating
09/24/2009
Citi
Hold
Buy
07/07/2009
Bank of America
Underperform
Neutral
11/03/2008
Citi
Hold
Buy
06/06/2008
Raymond James
Market Perform
Strong Buy
05/23/2008
Deutsche Bank
Hold
Buy
08/21/2007
Lehman Brothers
Equal-Weight
Overweight

National Semiconductor (NSM) Downgrades

Date
Analyst
Old Rating
New Rating
11/13/2008
Raymond James
Outperform
Underperform
05/15/2008
Merrill Lynch
Buy
Neutral
03/28/2008
Goldman Sachs
Neutral
Sell
02/05/2008
Raymond James
Strong Buy
Market Perform
01/02/2008
Banc of America Sec
Neutral
Sell
11/12/2007
UBS
Buy
Neutral

National Semiconductor (NSM) New Coverage

Date
Analyst
Rating
11/26/2008
Morgan Keegan
Market Perform
04/09/2008
Longbow Research
Neutral
03/31/2008
Thomas Weisel
Market-Weight
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