Why Linear Technology (LLTC) Stock Is Down Today

NEW YORK (TheStreet) -- Linear Technology (LLTC) was falling 4.4% to $45.05 Wednesday after meeting analysts' expectations in its fiscal third quarter results and issuing a soft guidance for the fourth quarter.

For the fiscal third quarter Linear Technology reported earnings of 48 cents a share, in-line with estimates from analysts surveyed by Thomson Reuters. Revenue grew 10.6% from the year-ago quarter to $348 million, missing analysts' expectations of $345.99 million by $2.01 million.

Looking to the fiscal fourth quarter, the company expects sequential revenue growth of between 2% and 6%, while analysts expect sequential growth of 5%.

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TheStreet Ratings team rates LINEAR TECHNOLOGY CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LINEAR TECHNOLOGY CORP (LLTC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LLTC's revenue growth has slightly outpaced the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 29.99% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LLTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • LINEAR TECHNOLOGY CORP has improved earnings per share by 15.8% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, LINEAR TECHNOLOGY CORP increased its bottom line by earning $1.72 versus $1.71 in the prior year. This year, the market expects an improvement in earnings ($1.93 versus $1.72).
  • The gross profit margin for LINEAR TECHNOLOGY CORP is currently very high, coming in at 79.16%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 31.30% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 69.27% to $169.04 million when compared to the same quarter last year. In addition, LINEAR TECHNOLOGY CORP has also vastly surpassed the industry average cash flow growth rate of -9.91%.
  • You can view the full analysis from the report here: LLTC Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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