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Linear Tech Plans Big Buyback

Shares surge in after-hours trading.
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Linear Technology


posted in-line third-quarter results and set plans for a $3 billion stock buyback, sending shares jumping in after-hours trading Tuesday.

For the quarter ended April 1, the Milpitas, Calif., chipmaker earned $98.6 million, or 32 cents a share, down from $110.6 million, or 35 cents a share, a year earlier.

Analysts polled by Thomson Financial projected earnings of 32 cents a share.

Excluding stock-option costs, non-GAAP earnings were $111.8 million, or 37 cents a share, down 7% from a year earlier.

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Revenue tumbled 9% to $255 million from $278.9 million a year earlier but edged past Wall Street's forecast of $254 million.

Linear said it was a "difficult" quarter given that revenue and earnings were down both sequentially and year over year, but it said orders rose during the period and that it had a positive book-to-bill ratio.

The company said the June quarter is a challenge to forecast, but it projected 3%-to-6% revenue growth for the period.

"Although inventory in the marketplace appears to be more balanced than in previous quarters, visibility continues to be low and customers remain guarded in their forecasting and inventory management," said CEO Lothar Meier.

Linear also said it plans to buy back some $3 billion in stock with existing cash and the proceeds of a $1.7 billion convertible note offering. The company, which has about $1.8 billion in cash on its balance sheet, said the buyback is contingent on closing the note sale.

Shares of Linear Tech recently were adding $2.78, or 8.7%, to $34.90 in after-hours trading.