WASHINGTON (dpa-AFX) - Analog Devices Inc. (ADI) Wednesday reported a more-than-anticipated decline in its first-quarter profit as the chip maker continued to be hurt by a decline in revenue and lower margins. Revenues for the quarter declined 11 percent from a year ago, while the drop was 10 percent sequentially.
Nonetheless, CEO Jerald Fishman said the slump in the semiconductor market was tapering off as pickup in orders late in the first quarter remained steadfast thus far. Fishman expects most of the growth in the second quarter to come from industrial customers, with a more modest growth seen from other end markets.
'Importantly, while we see improvement in our business, we are mindful of the uncertain macroeconomic environment and we will continue to aggressively monitor and control expenses in the second quarter,' said Fishman.
Analog Devices' revenue slump comes amid a low trough the sector had gone through. Other companies that reported lower growth recently include STMicroelectronics Nv(STM) and bigger rival Texas Instrument Inc. (TXN).
Gross margin for the quarter slid to 63.2 percent from 66.2 percent last year, and operating margin fell to 28.3 percent from 35.6 percent.
Moving forward, Analog Devices provided a weak guidance for the second quarter, with both earnings and revenue indicated to miss expectations.
Analog Devices, which makes high performance signal processing solutions, earned $139.4 million or $0.46 per share in the first quarter, down from $222 million or $0.72 per share last year.
Excluding items, adjusted earnings were $0.46 per share, compared to $0.66 per share a year ago. On average, 23 analysts polled by Thomson Reuters expected earnings of $0.48 per share for the quarter. Analysts' estimates typically exclude special items.
Norwood, Massachusetts-based Analog Devices reported revenue of $648 million, down 11 percent from a year ago. Twenty-two analysts estimated revenues of $662.29 million for the quarter.
Sequentially, revenue dropped 10 percent.
Industrial market revenues slid 15 percent from last year, and Consumer market revenues dropped 20 percent. Communications market revenues fell 18 percent, while Automotive gained 26 percent, year-over-year.
By product type, Analog Signal Processing revenues fell 12 percent from the prior year. Another part of Analog Product category, Power management & reference revenue dropped 16 percent for the quarter.
The company expects second-quarter earnings in the range of $0.48 to $0.53 per share and revenues of $655 million to $675 million. Street analysts currently expect earnings of $0.54 per share for the quarter, on revenues of $683.61 million.
Analog Devices also announced a 20 percent increase in its regular quarterly dividend to $0.30 per outstanding share of common stock, payable on March 28 to shareholders of record on March 9.
ADI closed Wednesday on the NYSE at $39.82, down $0.37 or 0.92%, on a volume of 3.3 million shares. In the after hours, the stock lost $1.02 or 2.56%.
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