Yogi,
Hopefully this will help CY tomorrow
ADI boosts outlook as 4th-quarter profit surges
By Nicole Volpe
NEW YORK, Nov 14 (Reuters) - Chipmaker Analog Devices Inc. (NYSE:ADI - news)
boosted its outlook for next year on Tuesday after reporting a fiscal fourth-quarter profit
that topped Wall Street expectations.
The Norwood, Mass.-based company said its profit for the three months ended Oct. 31
rose to $206.5 million, or 54 cents per share,
from $73.2 million, or 20 cents per share, a year ago.
Wall Street analysts on average had been expecting the firm, which makes chips that
transform voice and other real-world sound
into digital data, to report a profit of 50 cents per share, according to research firm First
Call/Thomson Financial.
Revenue surged 87 percent to $806 million. Analysts had been looking for sales of about
$800 million, according to First Call.
Analog Devices shares rose in after-hours trade, adding to hefty earlier gains in regular
trade. The stock traded at $61-5/8 on the
Instinet electronic brokerage system Tuesday evening after closing on the New York
Stock Exchange at $55-1/2.
The company said first quarter earnings per share could be in the range of 58 cents to 60
cents, above current analysts' estimates
for 54 cents per share. For all of fiscal 2001, sales could exceed $3.8 billion, it said.
``Our balance sheet also continued to strengthen during the fourth quarter,'' said
President and Chief Executive Jerald Fishman.
``Inventories and accounts receivable both declined in days and cash flow was strong.''
Chase H&Q analyst Lucas Ward said in a note to clients issued before the earnings
report that inventory concerns had been a
factor in bringing down the stock 50 percent since September.
He said the market ``is overlooking ADI's primary weapon against inventory 'blindsides'
-- diversification.'' The company has no
customers that account for more than 5 percent of sales and the single largest
end-market is less than 12 percent of sales, he said.
ADI said its gross margins as a percentage of sales increased to 58.6 percent vs. 52.2
percent a year ago.
During a conference call, executives said that even after reviewing orders with
customers to adjust for what the company could
ship, it still had more orders than could be addressed for the first quarter.
``We scrubbed a bunch of backlog out of the system, and it is still well above what we
can address this quarter,'' said Fishman. ``In
the second quarter our backlog is pretty good as well.''
He said the orders, even after the adjustments, were considerably above what the
company was predicting for sales in the first
quarter.
``Given our high backlog and strong new orders during the fourth quarter, we believe we
can achieve 7 to 10 percent sequential
revenue growth in the first quarter of fiscal 2001,'' said Fishman. ``Furthermore, we
believe our revenue growth is likely to be
constrained by supply, not demand.''
The executives said capital spending for fiscal year 2001 would be roughly $450 million
and the company could add capacity at
the rate of 50 percent per year. |
