Analog Devices Lowers Revenue Forecast Due to Coronavirus
February 19 2020 - 7:54AM
Dow Jones News
By Micah Maidenberg
Analog Devices Inc. lowered its revenue outlook for its second
quarter by $70 million due to the coronavirus outbreak, which has
slowed economic activity in China and has been reported in other
countries around the world.
The effects of the virus "are difficult to estimate and the
situation remains dynamic," the chip maker said Wednesday.
Over all, Analog forecasts second-quarter revenue of $1.35
billion at the midpoint.
Analog has moved to build up its business in China. In 2017, the
company acquired circuit maker Linear Technology Corp. in a deal
valued at $15.8 billion, lifting revenue in the market for its
subsequent fiscal year.
In its 2019 fiscal year, Analog generated $1.32 billion in
revenue in China, up 8% over the comparable period and representing
22% of total revenue, according to the company's latest annual
report.
Demand for communications products bolstered results in China in
the 2019 fiscal year, Analog said.
The company on Wednesday reported $1.3 billion in revenue for
its first quarter, which ended Feb. 1, down 15% compared with the
comparable period a year earlier. Revenue was in line with
forecasts from analysts polled by FactSet.
The Norwood, Mass.-based company said profit fell to $203.9
million, or 55 cents a share, from $355 million, or 95 cents a
share, year over year. Analog's adjusted profit of $1.03 a share
beat the consensus estimate for that metric by three cents.
Gross margins slipped to 65.1% from 67.5%.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
February 19, 2020 08:39 ET (13:39 GMT)
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