NORWOOD, Mass.--Analog Devices Inc. today slashed its estimates for the company's second fiscal quarter, predicting a 20-to-22% sequential drop in revenues from the prior three-month period due to slowing chip orders.
The Norwood chip company also warned that the slump is expected to continue through its third fiscal quarter, with sales now estimated to be 5% lower in that period compared to the second fiscal quarter, which ends May 5. The supplier of analog chips and digital signal processors said its current outlook suggests that the fiscal third quarter could be the low point in the current downturn with a modest sequential increase in sales occurring in the final period of its fiscal year.
Analog Devices said its second quarter revenues would total $600-to-620 million, compared to $772 million in the Q1 period, ended Feb. 3. Previously, the company was forecasting a 6-to-8% sequential drop in sales during the current fiscal quarter (see Feb. 15 story).
"Most of these reductions are the result of substantial decreases in shipments to large North American telecommunications OEMs, wireless infrastructure OEMs, and ATE automatic test equipment suppliers in the U.S. and Japan," said Jerry Fishman, president and CEO of Analog Devices. "Our distribution sell-through, which represents tens of thousands of end customers worldwide, is expected to be approximately flat to last quarter, following a sequential decline in the first quarter."
"We believe our shipments to OEM customers are running below their consumption levels, which is bringing down their inventories," he said. "We are also encouraged by the trend in our distributors' shipments to their customers, which appear to have stabilized following the decline we saw last quarter."
However, Analog Devices remains cautious about the rest of the year, said the chief executive. "We currently believe that third-quarter revenues could be approximately 5% below those for the second quarter. We also believe that the third quarter could be our trough quarter, with revenues showing modest sequential growth in the fourth quarter," he added.
Analog Devices is estimating a second fiscal quarter operating margin of about 25% of sales and a pro forma earnings of $0.31-to-0.33 per share. In the prior fiscal quarter, the company posted earnings of $0.50 per share. Until today, Wall Street's consensus for Analog Devices earnings in the quarter was $0.41 per share, based on a survey of analysts by First Call/Thomson Financial.
Results for Analog Devices' second fiscal quarter will be posted May 17.
RSS
Digital
10 emerging technologies to watch:
EE Times has compiled a list of emerging technologies that we think will be worth watching out for in 2010. Biofeedback or thought-control of electronics are among the contenders.
Hot applications in 2010:
We've compiled a list of 10 technology applications you should watch for in 2010, ranging from e-book readers to 3-D TVs. We examine the features that make these apps so compelling as well unresolved issues.
Top 25 predictions for semis in 2010:
2010 is just beginning to unfold in the electronics industry. Looking into our crystal ball, we have released our own chip forecasts--and other predictions--for 2010.
Seven things to fix in 2010:
The editors of EE Times came up with their own informal list of things we hope engineers fix in 2010, spanning everything from nano-lithography to space travel. What do you want to see get done this year?
'09 moves that are shaping the future:
This was a brutal year, but the industry gets a nod for showing grace under fire. Here's our Top 10 guide to the coming year, illustrating what to expect in 2010.
10 CEOs out in 2009:
It's been a tough year for the global electronics industry and CEOs. We survey the dismissal of 10 industry CEOs during the first three quarters of 2009 and what's ahead for the rest of the year.
Notable women in microelectronics:
There is no better time than a global economic recession to examine the keys to successful corporate governance. So, EE Times has compiled an international list that celebrates women who are business and technology leaders in semis.
EE Times updates Silicon 60:
Seventeen companies have been added to the lastest version of our Silicon 60 list of emerging startups. Forty-three companies survived as emerging companies that are still worth watching.
RSS| 
Digital| 
Mobile
