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National Semiconductor (NSM) was hit by a pair of analyst estimate cuts Wednesday ahead of its earnigns announcement after the close tomorrow.

Christopher Danely, chip analyst with J.P. Morgan
, writes Wednesday that “the bookings weakness that caused the company’s negative pre-announcement on February 4 continues and business has not materially improved since the negative pre-announcement.”

Danley expects the company to guide to a May quarter sequential revenue decline in the low-to-mid single digits, with a concurrent decline in gross margins. He cut his EPS estimate for the company’s fiscal year ending May 2008 to $1.07 from $1.11; for ‘09 he goes to $1.18, from $1.35. Despite the cuts, he repeated his Overweight rating on the stock, which he says is trading at the lower of its historical valuation range on a multiple of both sales and earnings.

RBC Capital’s Mahesh Sanganeria made a similar move: he expects the February quarter in line, but sees May quarter guidance below consensus. “Even though management claims handset order patterns returned to normal patterns after a sharp drop over the holiday season in Dec.-Jan., we expect the excess inventory to dampen sales into fiscal Q4,” he writes. “Our checks show tepid pick up in fab loading and flattish expectation at packaging facility.” Sanganeria trimmed his FY ‘08 EPS estimate to $1.36 from $1.41; his price target drops to $18, from $21. He keeps his rating at Sector Perform. “We would sit on the sidelines while the cycle plays out,” he writes.

For the quarter, the Street is looking for revenue of $457.4 million and EPS of 24 cents; for the May quarter, the consensus is $472.5 million and 29 cents.

Despite the estimate cuts, NSM Wednesday is up 17 cents at $17.07.

Source: National Semi: Analysts Trim Estimates Ahead of Earnings