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National Semi guides low but sees end of correction

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CIOL Bureau
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SAN FRANCISCO, USA: National Semiconductor Corp forecast revenue below expectations for the current quarter, but said an inventory correction should end soon.

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Shares of the Santa Clara, California-based company lost ground after it said revenue in the current quarter, which ends in February, would drop between 8 percent and 12 percent from the three months before.

Before the results came out, analysts on average had expected a 4 percent decline in revenue for the current quarter, according to Thomson Reuters I/B/E/S.

"Investors had hoped maybe business is stabilizing and it doesn't seem like it has stabilized just yet," said Tore Svanberg, an analyst at Stifel Nicolaus.

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After electronics manufacturers enthusiastic about an economic recovery overbought chip supplies in early 2010, demand has slowed as they used up inventories.

National Semiconductor said its was shipping less to its distributors as they adjust their inventories to normal levels.

"I think with reasonably positive economic continuity we should get this through our books in the February quarter," chief executive Don Macleod told Reuters.

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His comments echoed Texas Instruments Inc, which said on Tuesday it was also confident an inventory correction with its customers would be shallow and short lived.

In recent years, National Semiconductor has reorganized its business to focus on high-profit analog chips that control power management in electronic devices, shedding various business lines.

Global semiconductor sales will grow 4.6 percent next year as the correction in chip demand carries on, market research group Gartner said on Thursday.

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National Semiconductor said net profit in the quarter ended Nov. 28 was $83.5 million, or 34 cents per share, up from $47 million, or 20 cents a share, in the year-ago period.

That was above analysts' average expectation of 32 cents per share.

National Semiconductor's shares fell as much as 4.7 percent in after-hours trade after closing up nearly 1.6 percent.

Revenue in the second quarter was $390 million, up 13 percent from the year-ago period and a bit below expectations of $399 million.

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