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Linear Technology Reports Quarterly And Year Over Year Decreases In Revenues And Net Income

Linear Technology Corporation (NASDAQ:LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter ended October 2, 2011. Quarterly revenues of $329.9 million for the first quarter of fiscal year 2012 decreased $28.6 million or 8% from the previous quarter's revenue of $358.6 million and decreased $58.7 million or 15% from $388.6 million reported in the first quarter of fiscal year 2011. Net income of $108.4 million decreased $49.8 million or 32% from the fourth quarter of fiscal year 2011 and decreased $28.8 million or 21% from the first quarter of fiscal year 2011. Net income for the fourth quarter of fiscal year 2011 benefited from a lower tax rate of 9.5% compared to the first quarter of fiscal year 2012 rate of 26.25%. Diluted earnings per share of $0.47 per share in the first quarter of fiscal year 2012 decreased $0.21 per share or 31% from the fourth quarter of fiscal year 2011 and declined $0.12 per share or 20% from the first quarter of fiscal year 2011.

During the first quarter the Company's cash, cash equivalents and marketable securities increased by $45.1 million to $967.7 million, net of spending $25.2 million to purchase 884,600 shares of its common stock in the open market. A cash dividend of $0.24 per share will be paid on November 30, 2011 to stockholders of record on November 18, 2011.

According to Lothar Maier, CEO, “Revenue declined 8% in our first fiscal quarter compared to the preceding fourth quarter of fiscal 2011, in line with our guidance. In the beginning of the quarter, we noted that orders had slowed and that global economic sluggishness appeared to affect the ordering patterns of our customers as they continued to work down inventories. Although cautious given the current economic state, we were hopeful that this would be temporary and that orders would pick up in the latter half of the quarter as inventories and orders were balanced against end customer demand. This did occur in a few of our markets, notably the automotive market as the efforts we have invested in that business are having positive results. However, business in our core industrial and communications end-markets continued to soften through the quarter as it appears that end-demand has softened. Consequently, we are cautious and we expect many of our customers, particularly in the industrial and communications end-markets to have year-end shutdowns and thereby delay inventory procurement into the new year. Accordingly, we expect another difficult quarter of declining revenues and earnings, with revenues down 9%-13% sequentially in the second quarter. As is our custom during these difficult business cycles, the Company will take the necessary measures to curtail spending and limit the impact of lower revenues on profitability. We expect operating income as a percentage of sales to be in the mid to low-forty percent range depending on sales. As we have demonstrated in other periods of economic uncertainty at these levels we expect to maintain industry leading profitability.”

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