Monday, November 22, 2010

Analog Devices Inc. (NYSE: ADI): Q4 Earnings Preview

Analog Devices Inc. (NYSE: ADI) is scheduled to release its fiscal fourth-quarter financial results after the closing bell on Monday, November 22, 2010. Analysts, on average, expect the company to report earnings of 70 cents per share on revenue of $755.81 million. In the year ago quarter, the company reported earnings of 36 cents per share on revenue of $571.60 million.

Analog Devices, Inc. engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications.

In the preceding fiscal third-quarter, the Norwood, Massachusetts-based company's net income was $199.5 million, or 65 cents a share, compared with a profit of $65.5 million, or 22 cents a share, in the year-ago quarter. Revenue soared 46% to $720.3 million from $492 million int he same quarter last year. Analysts, on average, expected the company to report earnings of 60 cents per share on revenue of $706.50 million. 

At its last earnings call in August, the company said that it expects to report fourth-quarter revenue in the range of $740 million to $770 million and earnings in the range of 68 cents to 72 cents per share. The company expects that growth will be broad-based across virtually all the end markets and all the geographies.The company anticipates gross margin in the range of 66% to 67% of sales.

The company is benefiting from increased industrial sales in Asia, including China. A global recovery after the sharp downturn last year also helped, as chip makers produced more chips to refill global inventories. Recently, the Semiconductor Industry Association predicted that worldwide chip sales for 2010 would total $300.5 billion, an increase of 33 percent over 2009 sales. That's more than the group had predicted in June, when it forecast 2010 sales of $290.5 billion.

Among other developments, Analog Devices recently entered into a collaboration with programmable-logic vendor Altera Corporation to streamline wireless infrastructure system development.

In terms of stock performance, ADI shares have gained nearly 9% since the beginning of the year.

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