* 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 (Reuters) - 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 trading.
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 recovers.
About 80 percent of LSI’s sales are tied to business spending, where the company said it was seeing signs of improvement.
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 burdened networks.
“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 Exchange. (Editing by Robert MacMillan, Bernard Orr)