Microchip maker Analog Devices Inc. (ADI), Tuesday reported a lower profit for the fourth quarter, as persistent sluggishness impacted most of its business segments and margins came under pressure. However, the company's quarterly earnings topped Street estimates by a penny, while revenues came in below expectations.
Analog Devices has detailed a weak outlook for the first quarter, citing poor orders, sending its shares down 3 percent in after-hours trade.
In sync with overall weakness in the semiconductor industry, Analog Devices has been seeing lower profit over the past quarters. Its CEO Jerald Fishman said orders during the quarter waned as customers reduced inventories, forcing the company to cut down on production - a trend that is expected to continue into the first quarter.
Analog Devices, which competes with Broadcom and Microchip Technology, said revenues for the quarter slid 3 percent to $695 million from $716 million last year. Twenty-three analysts on consensus estimated revenues of $696.98 million for the quarter.
Revenues from industrial and Automotive segments each fell 3 percent, while consumer revenues were down 6 percent from last year.
Gross margins for the quarter contracted to 63.8 percent from 64.3 percent in the same period a year ago. Operating margin declined to 31 percent, compared with 32.9 percent last year.
The Norwood, Massachusetts-based company reported fourth-quarter net income of $179 million or $0.58 per share, down from $183.5 million or $0.60 per share last year. On average, 25 analysts polled by Thomson Reuters expected earnings of $0.57 per share for the quarter. Analysts' estimates typically exclude special items.
For the first quarter, the company estimates earnings of $0.40 to $0.48 per share and expect revenues to decline 6 to 12 percent. Analysts currently expect earnings of $0.54 per share on revenues of $683.24 million.
The company has declared a cash dividend of $0.30 per outstanding share of common stock, payable on December 18 to shareholders of record as on December 7.
ADI closed Tuesday at $40.13, down 0.62%, on a volume of 2.8 million shares on the NYSE. In after hours, the stock dropped $1.27 or 3.16%. In the past year, the stock has traded in a range of $32.85 - $41.79.
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