UPDATE 2-National Semi profit, outlook beat forecasts
* Q3 EPS 22 cents vs Street view 18 cents
* Q3 revenue $361.9 mln vs Street view $348.58 mln
* Sees Q4 rev $375 mln-390 mln vs Street view $360.89 mln
* Shares up slightly in extended trading (Adds comments from CEO and analysts, details on factory utilization, byline; updates shares)
By Ian Sherr
SAN FRANCISCO, March 11 (Reuters) - National Semiconductor Corp (NSM.N) posted results and a revenue outlook that beat estimates, as sales to industrial markets and improved corporate spending pushed margins to a record high.
National Semiconductor said Wednesday it saw increased demand for its specialized analog chips across the board. But some analysts said concerns remained about a possible build-up of inventory as companies order too much in a recovering economy.
That would hurt sales down the road, they said.
"The concerns I have are supply-chain related, and I think everybody has those," said Canaccord Adams analyst Robert Burleson. "Are we over-shipping? Is there a buildup of inventory out there?"
This week, Texas Instruments Inc TXN.N raised the low end of its quarterly earnings and revenue forecasts, saying it was struggling to fill orders in time as demand for chips was rising faster than it could make them -- leaving an opening for competitors like National Semiconductor.
But analysts warned that efforts by TI and other chip makers to ramp up shipments might result in a build-up of too much inventory at its clients. [ID:nN08195713]
National Semi executives told analysts on a conference call they were comfortable with build-ups in distribution channels, as the company targets 9-10 weeks of inventory.
It forecast revenue for the current quarter of $375 million to $390 million. That surpassed Wall Street forecasts for $360.89 million.
"We're benefiting from improving economies around the world," Chief Executive Donald Macleod told Reuters.
Though Macleod said National Semiconductor's factory utilization is still below 50 percent, the company's internal inventory was $2 million lower and it is actively hiring 200 workers for its manufacturing plants.
Semiconductor companies are expected to have fared well in the quarter, with analysts searching for signs that the industry is benefiting from improving markets both in the United States and around the world.
National Semiconductor is especially sensitive to an economic recovery as the chip maker's analog chips are used in everything from cars to cell phones such as Apple Inc's (AAPL.O) iPhone and Palm Inc's PALM.O Pre.
The company said net income rose to $53.2 million, or 22 cents a share, in its fiscal third quarter ended Feb. 28, up from $21.1 million, or 9 cents a share, in the year-ago period.
That came in ahead of analysts' average estimate of 18 cents a share, according to Thomson Reuters I/B/E/S.
Revenue rose to $361.9 million from $292.40 million the previous year, above Wall Street's target of $348.58 million.
National Semiconductor forecast revenue for the current quarter of $375 million to $390 million. That surpassed Wall Street forecasts for $360.89 million.
Shares of Santa Clara-based National Semiconductor rose 1.8 percent in extended trading to $14.60 from their $14.34 close on the New York Stock Exchange. (Reporting by Ian Sherr; Editing by Tim Dobbyn and Richard Chang)
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