* Sees Q1 rev of $590 mln to $620 mln
* Sees Q1 EPS ex-items in range of 4 cents to 10 cents
* Shares down more than 7 percent after hours
(Adds details on earnings and forecast, analyst comment)
By Ian Sherr
SAN FRANCISCO, Jan 27 LSI Corp (LSI.N) reported
better-than-expected results but offered a first-quarter
outlook that matched Wall Street forecasts, disappointing
investors hoping for signs of a faster recovery in 2010.
Its shares slid as much as 7 percent after hours on
Wednesday, following a 4.5 percent gain during regular
Kaufman Brothers analyst Suji De Silva said investor
expectations had run too high. LSI's stock has rallied nearly
18 percent over the past three months on hopes of a stellar
quarter and outlook.
"People's expectations are probably a little high compared
to the pace of recovery," De Silva said. "The numbers were
solid and the guidance was fairly solid, but investors were
probably expecting a faster recovery than these guys were able
to guide to."
LSI's revenue plunged 20 percent year-on-year in 2009's
third quarter. However, year-on-year was up just 4 percent in
the seasonally strong, holiday fourth quarter.
Still, analysts said the results from LSI, whose chips are
used in hard drives and other networking hardware, were the
latest positive sign that a battered semiconductor industry
will benefit as corporate demand for technology products
About 80 percent of LSI's sales are tied to business
spending, where the company said it was seeing signs of
LSI Chief Executive Abhi Talwalkar told Reuters in an
interview that increased corporate spending on servers -- both
to replace old hardware and to take advantage of Intel Corp's
(INTC.O) newest chips -- pointed to sustained growth.
Talwalkar also said pressure from new consumer devices,
such as Apple Inc's (AAPL.O) iPad [ID:nN27203955] with its
multimedia and database-driven applications, will push
communications carriers to invest in infrastructure to relive
"You're not only going to need more bandwidth but also more
capabilities," Talwalkar said.
LSI's fourth-quarter net income rose to $64.83 million, or
10 cents a share, in its fiscal fourth quarter ended December
31, compared with a net loss of $606.35 million, or 94 cents a
share, a year ago.
Excluding items, LSI earned 18 cents a share, ahead of the
average analyst estimate of 11 cents a share, according to
Thomson Reuters I/B/E/S.
Revenue rose to $637.8 million from $609.96 million a year
ago, and ahead of the Wall Street target of $632.46 million.
LSI forecast adjusted earnings for the current quarter of 4
cents to 10 cents a share on revenue between $590 million to
$620 million, broadly in line with Wall Street Estimates.
Shares of Milpitas, California-based LSI closed at $6 but
fell to $5.57 in after-hours trading on the New York Stock
(Editing by Robert MacMillan, Bernard Orr)