National Semiconductor Q1 sales up 31% year on year

National's first quarter sales were 3% higher sequentially from the $398.5m in sales reported in the fourth quarter of fiscal 2010 and 31% higher than the $314.4m reported in the first quarter of fiscal 2010. First quarter fiscal 2011 sales increased sequentially due primarily to demand from wireless handset and industrial markets, the two largest markets served by National. First quarter net income of $88.8m was an increase from the $79.2m in the fourth quarter of fiscal 2010, while National reported net income of $29.8m in the first quarter of fiscal 2010. First quarter gross margin of 70.9% set a new record for the company, driven by improved manufacturing cost efficiencies from higher capacity utilisation and benefits from manufacturing consolidation completed in the fourth quarter of fiscal 2010. National reported gross margin of 68.8% in the fourth quarter of fiscal 2010 and 61.1% in the first quarter of fiscal 2010. "Our business model is working well with another quarter of revenue growth, 70% gross margins and over 36% operating margins," said Don Macleod, National's chairman and chief executive officer. "However, in the near term, slower growth in our end markets and distribution channel, along with some likely inventory reduction, will mute the seasonal growth that we would normally see in our business during this time of the year." However, in the first quarter of fiscal 2011, National's total company bookings decreased 10 percent sequentially, primarily from the company's distribution channel.