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National Semi Cuts Revenue Outlook

Sales to cell-phone makers are sluggish.

National Semiconductor


cut its revenue estimates for the current quarter, blaming slow sales to cell phone makers.

The Santa Clara, Calif., chipmaker said late Tuesday that it now expects sales in its fiscal second quarter to decline 7% to 8% sequentially, instead of the 2% to 5% decline it originally projected.

Shares of National Semi slipped 2.4%, or 59 cents, to $23.36 in extended trading Tuesday.

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The warning marked the second quarter in a row National Semi has had to trim its sales projections because of weaker than expected chip sales to cell phone companies. In August, National Semi warned the Street that its fiscal first-quarter sales would be about $20 million less than its initial guidance.

On Tuesday, National Semi said decreasing foundry revenue from its divested cordless and PC super I/O business accounted for 4% of its sequential sales decline -- as the company had initially expected.

But the chipmaker said lower than expected shipments to wireless handset customers was the primary reason for the extra 3% to 4% of revenue decline, leading to its latest downward revision.

National Semi said its gross margin for the second quarter would range between 59% and 60%, vs. its initial guidance that gross margin would be above 60%, including stock option expenses.

The company said it would provide more detail on the results during its quarterly earnings conference call in early December.