8/15....ADI..Analog Devices Q3 revs surge 85 percent
(UPDATE: Adds company CEO comment and outlook for 2001)
biz.yahoo.com
By Tim McLaughlin
BOSTON, Aug 15 (Reuters) - Analogue Devices Inc (NYSE:ADI - news). said on Tuesday its third-quarter earnings nearly tripled, beating analysts' estimates, on accelerating demand for computer chips used in the communications industry.
Excluding a one-time gain, Analogue Devices said it earned $164.5 million, or 43 cents a share, in the third quarter, compared with $54.6 million, or 15 cents a diluted share, in the year-ago period. Net sales rose 85 percent to $700.6 million from $379 million in the year-ago quarter.
The earnings release triggered a run-up in shares of Analogue Devices, which moved up nearly 5 points to 81.25 on the Instinet order-matching system in after hours trading. The company's computer chips are found in digital cameras, cellular telephone base stations and the high-speed telecommunications networks boosting traffic on the Internet.
Analysts surveyed by First Call/Thomson Financial, had estimated, on average, Analogue Devices would report a profit of 37 cents per share.
Analogue Devices Chief Executive Jerald Fishman said he expected the company's sequential growth in the fourth quarter to surge 12 to 14 percent. During a conference call with analysts, he estimated Analog's fourth-quarter earnings would be as much as 50 cents a share on revenue of up to $800 million.
Analogue said the communications market accounted for 45 percent of its third quarter revenue. Fishman said the company's highest growth and profit potential comes from selling computer chips to companies building out wireless and broadband networks. Sales to the communications market increased 131 percent in the third quarter, compared with the year-ago period.
``These guys have a very diversified portfolio sold across several industries,'' said Richard Faust, an analyst at Adams, Harkness & Hill Inc. Faust rates the company's stock as an accumulate.
Analog's strong third quarter runs counter to recent concern raised by some analysts that the semiconductor industry's current boom cycle is approaching its peak.
Fishman said Analog's year-over-year revenue growth in fiscal 2001 could exceed 45 percent. Analogue Devices said its capital investment plans call for spending up to $500 million in 2001, with an emphasis on keeping up with customer demand.
Makers of chips used in telecommunications took a beating last month after one of their biggest customers, Finnish mobile phone giant Nokia Corp (NYSE:NOK - news), issued a profit warning for the third quarter. Analog's sales to mobile phone makers account for only 5 percent of its total sales, Fishman said.
Before the earnings release, shares of Analogue Devices closed up 1/2 to 76-13/16 Tuesday on the New York Stock Exchange. The company's stock price has gained more than 70 percent since the beginning of the year.
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