National Semi Cuts Revenue Outlook

SAN FRANCISCO -- The weakening wireless and consumer electronics market claimed another victim Monday, as National Semiconductor(NSM - Cramer's Take - Stockpickr) cut its sales forecast for the current quarter.

National Semi said sales will decline about 9% to 10% sequentially in its fiscal third quarter ended Feb. 24, instead of its original expectation of a 1% to 5% decline.

National Semi projected revenue of $450 million to $455 million, vs. the average analyst expectation of $484.7 million, as polled by Thomson Financial.

Shares of National Semi slipped 2.7% in recent after-hours trading to $18.50.

The company blamed the shortfall on "lower-than-expected shipments to global original equipment manufacturers (OEMs) as well as handset companies in China which National serves through distribution channels."

The news echoes last week's disappointing results by chipmaker RF Micro Devices(RFMD - Cramer's Take - Stockpickr), which also traced declining sales to weak business among Chinese cell phone handset makers.

National Semi said the lower sales will dent its profit margin, and said the gross margin in the current quarter will be roughly 63%, compared to 64.4% in the fiscal second quarter.

National Semi also said its results will include a $20 million pretax charge stemming from its previously announced plans to eliminate jobs in manufacturing facilities.