Second-quarter profit slumped at
Shares spiked on the initial news, and were recently up 37 cents, or 1.1%, to $34.43.
The semiconductor maker said in a press release Thursday that net income for the quarter ended April 30 fell to $117.6 million, or 31 cents a share, from $152.6 million, or 39 cents a share, a year earlier.
Quarterly sales fell 11% to $603.7 million from $678.5 million a year ago.
The results narrowly beat the current analyst consensus, which was for earnings of 30 cents a share and revenue of $604.1 million.
For the near term, the company was optimistic. "We continue to believe we are in the early stages of a gradual recovery after six months of inventory corrections at many of our customers worldwide," said Jerald G. Fishman, ADI's president and CEO. "Demand in many of our end markets is good, with particular strength in the consumer market and across the industrial end markets, which represent tens of thousands of customers worldwide. Our converter, amplifier, and general-purpose DSP products have resumed growth. Wireless handset and ATE products, which were responsible for a large portion of our sales decline for the past few quarters, appear to be stabilizing. Our lead times are short and we intend to keep them short to minimize order volatility throughout the cycle."
The company said that, assuming normal seasonality, it expects third-quarter revenue to be flat to up 3% sequentially, suggesting a range of $604 million to $622 million. Analysts had predicted third-quarter revenue of $617.6 million.
In addition, Analog Devices sees third-quarter gross margins improving toward 58%, depending on product mix, and is planning for inventory to remain about flat. The company also expects to hold operating expenses flat with second-quarter levels.
As a result, ADI expects third-quarter earnings of 31 cents to 33 cents a share, bracketing the current First Call consensus of 32 cents a share.
The company also declared a dividend of 10 cents a share for the second quarter, up from 6 cents a share in the first quarter.