Chipmaker Analog Devices Inc. (ADI) is slated to release its fourth-quarter earnings results after the market closes Monday. The Norwood, Massachusetts-based company anticipates earnings from continuing operations for the quarter to be about $0.24 to $0.26 per share, and revenue between about $510 million and $530 million.
On average, 21 analysts surveyed by Thomson Reuters expect the company to post earnings of $0.26 per share for the quarter, with estimates ranging between $0.25 and $0.28 per share. Analysts' estimates typically exclude special items. Revenues for the quarter are estimated to be $523.84 million, representing a 20.7% fall from last year.
In the same quarter a year ago, the company had reported net income of $143.87 million or $0.49 per share, on revenues of $661 million.
While issuing the fourth-quarter forecast back in August, Analog Devices' President and Chief Executive Officer Jerald Fishman stated, "There are near-term indications that business conditions are improving. Order rates strengthened throughout the third quarter and have remained strong during the first two weeks of August. Our book-to-bill ratio for the third quarter, as measured by end customer bookings, was above one, and our fourth quarter opening backlog was up from last quarter."
Fishman added, "While we plan to continue to tightly manage inventory levels, we expect a small increase in utilization, which should result in a gross margin in the fourth quarter of approximately 55%. In addition, we plan to continue to closely manage operating expenses and expect them to increase slightly by approximately 1% to 2% in the fourth quarter."
For the fiscal year 2009, Wall Street analysts estimate the company to post earnings of $0.88 per share, with expectations between $0.84 and $0.90 per share, while revenues are projected to be $1.97 billion, representing a 23.8% decline from last year.
For 2008, Analog Devices' net income was $786.28 million or $2.65 per share, and income from continuing operations was $525.18 million or $1.77 per share, on revenues of $2.58 billion.
According to Semiconductor Industry Association, or SIA, President George Scalise, "Amid signs that we are in the early stages of recovery in the global economy, semiconductor sales continue to reflect normal seasonal patterns. Sales are running well ahead of the worst-case scenarios projected early in the year, and we are optimistic that total sales for 2009 will be better than our mid-year forecast. The new forecast is brighter than our earlier projections, reflecting an improving global economy. Unit sales of key demand drivers - including PCs and cell phones, which together account for about 60% of semiconductor demand - have been stronger than previously predicted. We remain cautiously optimistic for the longer term. The current forecast is closely tied to projections of continuing improvement in the worldwide economy."
In its preceding third quarter, Analog Devices' net income declined to $65.6 million or $0.22 per share from $138.6 million or $0.47 per share last year, on lower demand for chips, reflecting the economic crisis that restricted consumer spending. Revenue declined 25% to $492 million from $659 million in the same quarter last year, and gross margin, as a percentage of revenue, decreased to 54.1% from 61.0% in the year-ago quarter.
In terms of end market, Analog Devices' third-quarter revenue from industrial customers, which represented 51% of total revenue, dropped 29.2% over last year, and revenue from communications customers, which amounted to 26% of total revenue, declined 9.1%.
Revenue from consumer customers, which accounted for 21% of total revenue, slipped 21.2% in the third quarter from last year, and revenue from computer customers, which was 2% of total revenue, dropped 51.9% from a year ago, reflecting the overall weakness in the PC market worldwide. In terms of products, analog revenue, which accounted for 92% of total revenue, declined 23.4% for the third quarter, and revenue from digital signal processing products, representing 8% of total revenue, decreased 42%.
Fishman then stated, "ADI had a solid third quarter, delivering sequential sales growth of 4% with the largest increases in the automotive and consumer end markets. During the quarter, we also saw order rates from industrial customers begin to improve as inventory reductions subsided. Importantly, we reduced costs for the third consecutive quarter, resulting in a cumulative decline in operating expenses of well over 20% since the end of fiscal 2008. By driving continued competitive advantage through innovation while remaining focused on expense management, we're positioning ADI to achieve solid revenue growth and operating leverage as demand improves."
Founded in 1965, Analog Devices designs, manufactures, and markets analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. The company's products are used in communications applications, including wireless handsets, wireless base stations and high-speed access to the Internet. Products are also used in consumer electronics, including digital cameras and camcorders, flat-panel and plasma digital televisions, video game applications, and surround sound audio systems, as well as personal computers and network servers.
SIA, in a November 2 statement said that worldwide sales of semiconductors in the quarter ended September 30 were $61.9 billion, down 10.1% from last year's $68.9 billion, but up 19.7% from $51.7 billion in the preceding quarter.
SIA President Scalise then said, "Global semiconductor sales in the third quarter were above expectations. September sales were in line with historical patterns, reflecting increased demand from end-users as they began the build for the holiday season. Unit sales of personal computers and cell phones - the two largest demand drivers for semiconductors - continue to run ahead of earlier forecasts. Meanwhile, demand for semiconductors for industrial applications - a sector that had declined sharply -- showed initial signs of recovery. Sales increased in all geographic regions." Among others in the industry, Texas Instruments (TXN), the world's second largest maker of mobile phone chips, in October reported a 4% drop in third-quarter net income to $538 million from $563 million in the prior year, hurt by lower revenue mainly in the Wireless segment. The Dallas, Texas-based chipmaker's earnings per share fell 2% to $0.42 from $0.43 in the year-ago quarter. Third-quarter revenue decreased 15% to $2.88 billion from $3.39 billion last year, due to the declines across all segments, particularly the Wireless segment.
Texas Instruments' chairman, president and Chief Executive Officer Rich Templeton then said, "Our performance in the quarter exceeded our expectations and was led by a second consecutive quarter of 20-percent growth in Analog."
Europe's biggest chipmaker, STMicroelectronics N.V. (STM) in October reported a third quarter loss that narrowed from a year ago, helped by narrower loss on equity investments. Net loss attributable to parent company was $201.00 million or $ 0.23 per share, compared to a loss of $289.00 million or $0.32 per share in the year-ago quarter. Adjusted net loss attributable to parent company was $153 million or $0.17 per share, compared to adjusted net income of $134 million or $0.15 per share last year. The Geneva, Switzerland-based semiconductor company's net revenues decreased to $2.28 billion from $2.70 billion in the prior-year quarter.
In a November 20 research note, brokerage BMO Capital Markets initiated its coverage Analog Devices with 'Market Perform' rating.
ADI closed Friday's regular trading session at $27.48, down $0.36 or 1.29%, on a volume of 3.59 million shares. In the past 52 weeks, shares have been trading between $15.29 and $29.71, on a 3-month volume of 4.3 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.