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UPDATE 1-Chip gear maker Applied Materials results beat estimates, shares rise

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May 16 (Reuters) - U.S. chip gear maker Applied Materials Inc's reported better-than-expected quarterly revenue and forecast third-quarter revenue and profit above estimates on Thursday, allaying investor concerns about slowing semiconductor demand.

Shares of the company rose over 4% in extended trading.

The semiconductor industry has been grappling with slowing demand that bellwether Texas Instruments warns is a cyclical downturn which could last for another two years.

Applied Materials forecast third-quarter revenue at about $3.525 billion, the mid point of which is above analysts' estimate of $3.51 billion. It forecast earnings per share of 67 cents to 75 cents, the mid point of which is above analysts' estimate of 69 cents.

Revenue from semiconductor systems in the reported quarter fell about 25% to $2.18 billion, but beat analysts' estimates of $2.16 billion.

Net sales fell 22.7% to $3.54 billion, but were above estimates of $3.48 billion, according to IBES data from Refinitiv.

The company's adjusted net income fell to $660 million, or 70 cents per share, in the second quarter ended April 28 from $1.24 billion, or $1.19 per share, a year earlier.

Analysts were expecting earnings of 66 cents per share. (Reporting by Shariq Khan in Bengaluru; Editing by Anil D'Silva and Shinjini Ganguli)