* Companies' guidance concern investors
* Weak PC and TV sales seen dragging on sales
* Nat Semi stock drops 5.7 pct, TI falls 1.4 pct
By Noel Randewich and Sinead Carew
SAN FRANCISCO/NEW YORK, Sept 9 Chip makers
National Semiconductor (NSM.N) and Texas Instruments Inc
TXN.N on Thursday issued quarterly financial targets that
stoked investors' worries about a sluggish economy.
Both companies cited weak demand for personal computers and
other devices that use microchips and National Semiconductor
said consumers were not spending as much as expected.
"We'd all like to believe that consumer spending is onward
and upward but I don't think it is," National Semiconductor
Chief Executive Donald Macleod told Reuters.
National Semiconductor said sales in the current quarter
could fall as much as 5 percent from the three months ended in
August as the companies it supplies reduce inventories. While
TI stuck with the midpoint of its revenue and earnings outlook
range this was not enough to cheer up investors.
Shares of National Semiconductor, which makes chips for
medical equipment, industrial power supplies and smartphones,
fell 5.7 percent after its report.
Santa Clara, California-based National Semiconductor's
guidance follows industry giant Intel Corp's (INTC.O) warning
in August that weaker-than-expected consumer demand for
personal computers would limit its sales growth.
"You can see what's happening here between Intel, National
Semiconductor and TI's report: demand has peaked and is
starting to head down," said Charter Equity Research analyst Ed
As U.S. unemployment remains high, investors have been
impatient with sluggish economic growth and some fear a
possible new downturn.
WEAKNESS IN PCs, TVs
While Texas Instruments kept the midpoint in its guidance
range for revenue and earnings per share in line with analysts'
expectations, its shares fell 1.4 percent because some
investors were disappointed it did not raise its targets.
Ron Slaymaker, TI's head of investor relations, said that
on top of weakening demand for personal computers and related
storage products, consumers also appeared to be buying fewer
televisions than expected this quarter.
Slaymaker attributed some of the weakness to a lack of
consumer interest in TVs boasting 3D technology and the fact
that the World Cup soccer tournament had boosted TV sales in
the previous quarter.
He said TI was still seeing strong demand from industrial
and wireless chip customers in the quarter.
While TI was bullish on smartphones, National Semiconductor
said it expects the weak economy to limit sales growth for its
chips that handle backlighting and camera flashes on
smartphones, Macleod said.
Snyder noted that TI's guidance followed several quarters
in which the company said it had trouble keeping up with
customer orders because demand was so strong.
"In this environment when you're not raising guidance and
other folks are indicating softness it's not going to be taken
well," Snyder said.
National Semiconductor said its net profit in the first
quarter was $89 million, or 36 cents per share, up from $30
million in the year-ago period. That was a little above
analysts' average expectation of 34 cents per share, according
to Thomson Reuters I/B/E/S.
Its revenue in the quarter was $412 million, a little less
than the $415 million expected by analysts.
TI's new outlook range implied a midpoint of 69 cents and
$3.70 billion, which was in line with the average analyst
expectation for earnings of 69 cents a share on revenue of
$3.689 billion according to Thomson Reuters I/B/E/S.
In July, TI had set earnings per share and revenue targets
also with a mid-point of 69 cents and $3.70 billion.
Asked about fourth-quarter demand during a conference call,
Slaymaker declined to give specific guidance except to note
that TI's revenue typically falls in that period as the prior
three months is boosted by sales of calculators to students
going back to school in September.
He did say, however, that the company expects a growth
spurt within the next year from the expansion of wireless
services in India.
(Reporting by Noel Randewich in San Francisco and Sinead
Carew in New York; Editing by Richard Chang)