Thrifty shoppers could bruise gadget maker profits

By Anupreeta Das

SAN FRANCISCO, July 22 (Reuters) - Fears that belt-tightening consumers will bruise third-quarter earnings for makers of MP3 players, cell phones and other gadgets, pummeled the stocks of consumer electronics companies like Apple Inc (AAPL.O: Quote, Profile, Research) and SanDisk Corp (SNDK.O: Quote, Profile, Research) on Tuesday, a day after they issued grim forecasts.

Apple gave a lower-than-expected third-quarter outlook on Monday, but said wider economic woes have not directly affected its results. Still, Apple shares fell 2.6 percent to $162.02 on Nasdaq Tuesday as several analysts cut their price targets on the stock. The stock fell as low as $146.53.

SanDisk, which makes flash memory for digital cameras and other devices, posted a second-quarter loss on Monday, sending its shares down 24 percent to $13.62 Tuesday on Nasdaq.

On Monday, SanDisk Chief Executive Eli Harari blamed the poor results on "the rapid deterioration in consumer confidence," which hurt sales to U.S. retail customers and cell-phone makers.

Texas Instruments Inc (TXN.N: Quote, Profile, Research), the No. 1 cell-phone chip maker, cut its revenue forecast on Monday.

Global Crown Capital analyst David Wu said that with TI's distributors apparently seeing normal sales to their customers, its weaker-than-expected outlook did not give any new insight into demand for consumer electronics.

But Wu said the back-to-school and holiday shopping seasons could see weakness in the United States due to high gasoline prices and consumer jitters about the economy.