UPDATE 2-Applied Materials sees revenue, semiconductor sales below estimates

(Adds details from conference call; updates share movement)

May 17 (Reuters) - Chip gear maker Applied Materials Inc on Thursday forecast current-quarter revenue and sales in its semiconductor business below Wall Street expectations, sending its shares down 5 percent in extended trading.

The company's forecast added to investor concerns over a slowing smartphone market, which had powered much of the boom in demand for high-end flash memory chips and had prompted Applied Materials' clients to invest heavily in semiconductor equipment.

"Smartphone sales have been below expectations, particularly for high-end models, and in response, both semiconductor and display suppliers have made adjustments to their capacity planning," Chief Executive Officer Gary Dickerson said on a post-earnings call.

The world's largest supplier of tools used by chipmakers forecast a 7 percent growth in semiconductor revenue for the third quarter, which implies $2.71 billion in revenue. That missed estimate of $2.90 billion, according to data and analytics firm FactSet.

Applied Materials, whose results are seen as the bellwether for the chip industry, counts Samsung Electronics Co Ltd , Micron Technologies Inc, Taiwan Semiconductor Co Ltd and Intel Corp as its top customers.

The company said it expects third-quarter revenue in the range of $4.33 billion and $4.53 billion, while analysts on average were expecting $4.53 billion, according to Thomson Reuters I/B/E/S.

The forecast overshadowed a strong beat on both revenue and profit for the second quarter.

Total revenue rose 28.8 percent to $4.57 billion, topping estimate of $4.45 billion. Net sales in its semiconductor business rose 24.8 percent to about $3 billion.

Sales from its display business which makes flat panel displays for televisions, PCs and smartphones rose 53.5 percent to $600 million, above estimates of $578.9 million, according to FactSet.

Excluding items, the company earned $1.22 per share, beating expectations of $1.14.

Executives during the call played down concerns over China, which accounted for about 25 percent of total revenue in the reported quarter.

"China is emerging as a spender," Chief Financial Officer Daniel Durn said on the call.

(Reporting by Munsif Vengattil in Bengaluru; Editing by Sriraj Kalluvila)