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Analog Devices' 4th-qtr profit falls 18 pct

November 21, 2011

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NORWOOD, Mass.—Analog Devices Inc. said Monday that its profit fell 18 percent in its fiscal fourth quarter as the chipmaker's revenue declined amid a slowdown in the semiconductor industry.

CEO Jerald Fishman said he expects revenue will decline sequentially in the company's current fiscal first quarter, citing inventory reductions by customers due to the uncertain global economy.

"We plan to bring production levels down in the first quarter, consistent with the decline in revenue, which should have a negative impact on gross margin," he added.

Analog's net income fell to $183.5 million, or 60 cents a share, in the three months ended Oct. 29. That compares with net income of $225 million, or 73 cents a share, in the comparable prior-year period.

Revenue slid 7 percent to $716 million from $770 million a year earlier.

Analysts polled by FactSet expected earnings of 63 cents a share on revenue of $726.7 million.

Management attributed the lower fourth-quarter results on a general slowdown in the semiconductor industry, particularly in the industrial and communications markets.

The company reduced production levels, which diminished its inventories despite lower revenue, and led to lower gross profit margins.

Analog expects first-quarter earnings per share will range from 44 cents to 51 cents. That's well below the 58 cents a share that analysts are expecting.

For fiscal 2011, Analog's net income rose to $867.4 million, or $2.81 a share, compared with a profit of $712 million, or 2.33 a share, the year before. Revenue climbed 8 percent to just under $3 billion from $2.76 billion a year earlier.

Meanwhile, the company declared a cash dividend of 25 cents to be paid on Dec. 21 to shareholders of record on Dec. 2.

Shares of Analog Devices slipped 24 cents to $34.10 in aftermarket trading. The stock ended the regular session down 96 cents, or 2.8 percent, at $34.34.