Hard Times at National Semi

The bad times aren't going away any time soon for National Semiconductor(NSM Quote).

In keeping with its warning to the Street last month, the Santa Clara, Calif., chipmaker said Thursday that its revenue and profit both declined in its fiscal second quarter.

And the company projected that sales in the current quarter would be down sharply from analysts' expectations, as bookings in its second quarter plunged 16% sequentially.

That pushed the company's shares down 3.5%, or 88 cents, to $23.92 in extended trading.

National Semi pointed to the continuing inventory build in its distribution channel, which has caused distributors to hold off on chip purchases in recent months.

But National Semi said the slowdown in orders for the current quarter was also driven by lower orders from OEM customers and contract manufacturers, suggesting that a broader malaise may be plaguing its business.

National Semi makes analog chips used in cell phones and displays as well as for industrial and automotive markets.

The company said sales in the three months ended Nov. 26 totaled $501.4 million, compared with $544 million at this time last year. Net income plunged 20% year over year to $91.4 million, or 27 cents a share.

The results were in line with analysts' dampened expectations following National Semi's November preannouncement in which it trimmed its sales and gross margin projections.