Analog Devices
said Wednesday that weaker demand from telecommunications companies and consumer electronics makers was hitting its chip sales.
Analog Devices
(ticker: ADI) reported adjusted earnings of $2.49 a share on revenue of $3.08 billion for the July quarter.
Analog Devices was expected to report earnings of $2.52 a share on revenue of $3.10 billion according to a FactSet poll of analysts’ estimates.
“In a challenging operating environment, ADI executed well, and delivered third quarter results within our expectations. However, the customer inventory adjustments we mentioned last quarter have accelerated as economic conditions deteriorate and our lead times continue to improve,” said CEO Vincent Roche in a company statement.
The company’s quarterly revenue was down 1% from the same period a year ago. Revenue in its biggest markets, the industrial and automotive sectors, rose. However, it was hit by sharp falls in sales of chips for communications and consumer devices.
For its fourth quarter Analog Devices forecast adjusted earnings per share of $2.00, plus or minus 10 cents, and revenue of $2.70 billion, plus or minus $100 million. That was below analysts’ previous expectations of adjusted EPS of $2.40 on revenue of $3.01 billion, according to FactSet.
In early trading, shares were up 0.2%. The stock had sharp premarket losses.
Fellow chip company
Nvidia
(NVDA) was up 1.4%, with its earnings set to come after the closing bell. Nvidia also sells chips and other technology to the automotive and telecoms industries, although it is a relatively small part of its business.
Analog Devices’ weak outlook echoes comments made by fellow chip maker
Texas Instruments
(TXN) last month. Analog Devices is expected to benefit from the shift to electric vehicles which need more chips than gas-powered automobiles. However, this year it has been hit by car-related weakness and softer industrial demand in China.
Write to Adam Clark at [email protected]
Read the full article here
