* Q4 adj EPS 14 cents vs est 13 cents
* Q4 rev rises 4 pct
* Sees Q1 rev $605 mln-$635 mln vs est $615.9 mln
* Sees Q1 EPS 7 cents-13 cents vs est 10 cents
* Shares up 2 pct after-hours
(Recasts, adds CEO, analyst comments, background)
By Supantha Mukherjee
BANGALORE, Jan 27 Microchip maker LSI Corp
(LSI.N) forecast an in-line first quarter and expects its
second half to be better than the first as it bets on new
design wins and seasonal growth cycles.
"This year is leaning more and more towards a normal
seasonal year where we will see the second half be better than
the first half and on top of that we got the benefit of our
product cycles," Chief Executive Abhi Talwalkar told Reuters in
a telephone interview from Milpitas, California.
A number of new design wins are coming into production this
year which will contribute to the top line, Talwalkar said.
LSI reported an increase in 2010 operating margins and
expects them to continue to grow in 2011, he said.
"LSI's operating margin for 2010 is 12.6 percent which is
its highest since Abhi took over five years back," Wedbush
Securities analyst Kaushik Roy said.
LSI, whose chips are used in hard drives and networking
hardware, said enterprise spending for IT infrastructure
products drove 2010 results and expects the momentum to
continue in 2011.
"A lot of enterprises, who couldn't do refresh in 2009,
started doing it in 2010 and will continue in 2011," analyst
"The end market hasn't changed but LSI is getting better.
So, either they are gaining market share, or having new design
wins. I think both are happening," Roy added.
About 85 percent of LSI's revenue is influenced by business
IT spending and the company is cultivating relations with
original equipment manufacturers of all sizes to generate
"We have been focusing on a broad base of OEMs such as ZTE
Corp (000063.SZ), Huawei Technologies Co Ltd [HWT.UL] and
Lenovo Group (0992.HK) in China. We are having discussions with
Acer APR.CN, some Japanese companies, and Silicon Graphics
International Corp SGI.O in the U.S.," Talwalkar said.
The company also is working closely with Oracle Corp
ORCL.O, which entered the storage market with the acquisition
of Sun Microsystems.
RESULTS BEAT VIEW
LSI, which counts International Business Machines Corp
(IBM.N), Hewlett-Packard Co (HPQ.N), Seagate Technology Plc
(STX.O) and Hitachi Ltd (6501.T) among its customers, reported
a fourth-quarter profit, excluding items, that was above Street
estimates even as its top customer Seagate posted a drop in
quarterly earnings. [ID:nN19246880]
Excluding items, the company earned 14 cents a share.
Revenue rose 4 percent to $664.5 million.
Analysts on average expected the company to earn 13 cents a
share, excluding items, on revenue of $649.4 million, according
to Thomson Reuters I/B/E/S.
LSI posted a net loss of $13.4 million, or 2 cents a share,
compared with a profit of $64.8 million, or 10 cents a share, a
The company forecast first-quarter adjusted profit of 7
cents to 13 cents a share, on revenue of $605 million to $635
Analysts were expecting earnings of 10 cents a share, on
revenue of $615.9 million.
Shares of LSI rose 2 percent in trading after the bell.
The shares, which have gained a quarter of their value in
the last three months, closed down 1 percent at $5.86 on the
New York Stock Exchange on Wednesday.
(Reporting by Supantha Mukherjee in Bangalore; Editing by
Prem Udayabhanu and Carol Bishopric)