SAN FRANCISCO—The top executives at analog chip makers Analog Devices Inc. (ADI) and Avago Technologies Ltd. sounded a note of cautious optimism, with both saying they see signs of improved business in the wake of the firms' most recent quarterly reports.
ADI (Norwood, Mass.) reported sales for the quarter ended Feb. 4 of $648 million, down 10 percent from the previous quarter and down 11 percent from the year-ago quarter. The company reported a net income for the quarter of $139.4 million, down 24 percent from the previous quarter and down 35 percent from the year-ago quarter.
ADI's sales for the quarter fell short of consensus analysts' expectations, which called for sales of $662 million, according to Yahoo Finance.
"Late in the first quarter, order rates began to accelerate and have remained solid so far this quarter," said Jerald Fishman, ADI's president and CEO, in a statement. "This leads us to believe that the first quarter marked the bottom of this industry cycle and we expect our business will improve beginning in the second quarter."
ADI said it expects sales to improve to between $655 million and $675 million for the current quarter. While an improvement, the range still fell short of consensus analysts' expectations, which call for the company to report sales of about $683 million for the current quarter.
Avago (Singapore) reported sales of $563 million for the quarter ended Jan. 29, down 10 percent from the previous quarter and up 2 percent compared with the year-ago quarter. The company reported a net income for the quarter of $132 million, or 50 cents per share, down 14 percent from the previous quarter but up 11 percent compared to the year-ago quarter.
On a pro forma basis, excluding charges, Avago reported a net income of $156 million, or 62 cents per diluted share, down 16 percent from the previous quarter and down 2 percent from the year-ago quarter.
Avago's results for the quarter exceeded consensus analysts' expectations, which called for sales of about $552 million and a pro form net income of 56 cents per share, according to Yahoo Finance.
For the current quarter, Avago said it expects sales to improve sequentially between 1 and 4 percent to between $568.6 million and $585.5 million.
Hock Tan, Avago's president and CEO, said in a conference call with analysts that the company expects economic trends to remain much the same in the company's fiscal second quarter, with strength in the wireless and wired infrastructure markets and lackluster sales to the industrial end market, with the macroeconomic environment stabilizing. "We now believe our industrial business has bottomed, but we only see limited signs of a recovery," Tan said.