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