Analog Devices 3rd-Quarter Net Down 23% on Softer Revenue

   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 [e-mail]

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