Analog chipmaker

Linear Technology

(LLTC)

reported sharp gains in first-quarter net income and revenue but said sales in the current quarter are likely to stay flat at best, an outlook that falls short of Wall Street expectations for growth.

The Milpitas, Calif.-based chipmaker said net income for its first fiscal quarter ended Sept. 26 totaled $103.5 million, up 49% from last year's levels. Earnings per share of 33 cents were a penny ahead of expectations.

Net sales totaled $253 million, up 45% from year-ago levels and about even with the consensus estimate, which was $252 million.

Revenue was up 6% from the June quarter.

However, Chief Executive Officer Robert Swanson said that during the quarter, bookings "softened moderately" and that Linear's distributors had slightly decreased their shipments in the quarter.

Swanson said it's hard to tell whether the trend at distributors mostly reflects inventory reductions, combined with a seasonal minor drop-off in demand, or whether it foretells a more serious decline in demand that could worsen in the coming quarter.

In Linear's case, he considers the problems to be temporary, noting that its inventory at distributors remains lean, cancellations are still minimal, and lead times have remained unchanged at four to six weeks.

In an after-hours release, Linear forecast that end demand should remain "relatively stable, with bookings increasing slightly over the quarter" but also said it expected to see "continued cautiousness" as customers continue to keep inventories low. On a sequential basis, the company said December quarter sales should be slightly down to flat from the September quarter.

Heading into today's release, the consensus estimate had reflected expectations for Linear's sales to rise to $260 million in the December quarter generating earnings of 33 cents.

After hours, however, shares gained 87 cents, or 2.4%, to $37.35. In regular trading, the shares closed down 36 cents, or 1%, to $36.48.