By Ben Fox Rubin
Analog Devices Inc.'s (ADI) fiscal third-quarter income shrank
23%, as three out of four of the chip maker's major segments posted
weaker revenue.
For its fourth quarter, the company predicted earnings of 54
cents to 60 cents a share on revenue of $685 million and $715
million. Analysts polled by Thomson Reuters most recently expected
60 cents and $714 million, respectively.
Demand for semiconductors has been shaky in the past few
quarters amid global economic worries, especially out of Europe,
and weaker consumer spending. Analog Devices, which specializes in
chips that measure data such as temperature or light and convert
them into digital information, hasn't been immune to the trend, now
posting four straight quarters of shrinking profits.
Rival Texas Instruments Inc. (TXN) last month posted its fifth
straight quarter of declining earnings amid persistently soft
demand. Both companies, though, have signaled that the market may
have reached its low point as the chip makers' customers look to
restock their lean inventories.
For the period ended Aug. 4, Analog Devices reported a profit of
$169.8 million, or 56 cents a share, down from $219.9 million, or
71 cents a share, a year earlier. Revenue shrank 9.9% to $683
million.
Analog Devices in May forecast per-share earnings of 54 cents to
58 cents on revenue of about $681.4 million to $702.1 million.
Gross margin narrowed to 65.6% from 67.2%.
The company's automotive segment again was the only one of its
four major businesses to see revenue growth, posting a 12%
improvement. The industrial segment--which accounts for nearly half
of the top line--saw its revenue sink 12%. At its consumer
business, revenue was down 19%, while the communications segment's
revenue was down 11%.
Shares closed Tuesday at $40.34 and were down 34 cents after
hours. The stock is up 13% so far this year.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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