DOW JONES NEWSWIRES
Analog Devices Inc.'s (ADI) fiscal first-quarter net income sank
93% on lower sales amid weak demand from consumers. Chief Executive
Jerald Fishman noted orders through December remained weak but
began to stabilize in January and early February.
The semiconductor maker also forecast fiscal second-quarter
earnings slightly below Wall Street's expectations.
Last month, Analog Devices joined a long line of
chip-manufacturing companies in predicting large drops in sales as
the market for computers and other consumer-electronics products
soured amid a sharp drop in discretionary spending last fall. At
the same time, the company has been cutting costs in some areas and
focusing on its core signal-processing technologies to boost
margins.
For the quarter ended Jan. 31, the company, which makes chips
used in cellphones, telecom base stations, medical devices and
flat-screen TVs, reported net income of $24.9 million, or 9 cents a
share, down from $370.7 million, or $1.22 a share, a year
earlier.
The latest results included 10 cents in restructuring charges,
while the prior-year included an 81-cent gain on the sales of two
businesses. Excluding the restructuring charge, earnings from
continuing operations fell to 18 cents a share from 40 cents.
Revenue dropped 22% to $476.6 million.
Last month, the company cut its guidance, projecting earnings
from continuing operations of 15 cents to 17 cents a share,
excluding restructuring charges, and a sequential revenue decline
of 25% to 30% to $462.7 million to $495.8 million.
Gross margin fell to 56.4% from 61.2% on lower manufacturing
output and additional inventory reserves because of lower
demand.
Industrial revenue, or 54% of the company's total, decreased
22%, with the largest decline among automotive customers. Revenue
in the low-margin consumer business fell 40%, while communications
revenue slid 3% and computer revenue declined 35%.
Among Analog Devices' products, analog revenue dropped 21% and
accounted for 91% of total revenue by product type.
Analog Devices expects fiscal second-quarter earnings from
continuing operations, excluding restructuring charges, of 8 cents
to 9 cents a share and revenue to decline by 5% to 15%
sequentially. Analysts estimated earnings of 10 cents a share on
revenue of $430.2 million, down 34% from a year earlier, according
to a poll by Thomson Reuters.
Analog Devices shares were at $19.91, down 0.6%, in after-hours
trading. The stock price has fallen 45% in the past nine
months.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com
