Sector Snap: Handsets decline on Apple forecast

Apple's shares tumbled $13.35, or 8 percent, to $152.94 in midday trading. In the past 52 weeks, the stock has traded between $111.62 and $202.96.

American Depositary Shares of Nokia Corp., the world's No. 1 cell phone maker, fell 81 cents, or 3 percent, to $26.51. The stock has traded in a 52-week range of $23.58 and $42.22.

Shares of Texas Instruments, whose results were hurt by weak sales of cell phone chips, fell $4.59, or 16.1 percent, to $23.93. They earlier hit a three-year low of $23.43.

Apple posted a solid fiscal third quarter, with profit and sales above Wall Street's expectations. But a tepid outlook spooked investors--even though Apple has a tendency to issue conservative guidance.

The company said it expects a profit of $1 per share on $7.8 billion in revenue. Analysts polled by Thomson Financial forecast earnings of $1.24 per share on sales of $8.32 billion.

Citi Investment Research analyst Richard Gardner called the quarter's results "stellar," and added that the stock was down on the company's conservative fiscal fourth-quarter and fiscal 2009 gross margin guidance, as well as management's "refusal to comment on (Chief Executive) Steve Jobs' health." He called the pullback a "buying opportunity."

An analyst inquired about the health of Jobs, who had a cancerous tumor removed from his pancreas in 2004, during a conference call Monday. Chief Financial Officer Peter Oppenheimer said Jobs has no plans to leave Apple and his health is a "private matter."

Elsewhere in the sector, shares of BlackBerry smart phone maker Research in Motion Ltd. fell $3.18, or 2.8 percent, to $111.85. The stock has traded between $61.54 and $148.13 over the past year.