Analog Devices has announced disappointing fiscal third quarter results and provided weak fourth quarter guidance on concerns that global economic uncertainty could cause its customers to pull back on spending.
The mixed signal and analogue specialist, which has posted soaring profits in recent quarters, reported sales for the quarter of $758million, down 4% from the previous quarter and up 5% from Q3 2010.
"After an unusually robust second quarter in which our revenue grew by 9% sequentially, revenue in the third quarter declined by 4% on a sequential basis, while increasing 5% year over year" said Jerald Fishman, company president and ceo."Nevertheless, most end markets remained relatively stable during the third quarter and we believe that most of the revenue shortfall was the result of supply chain recalibration, not a change in underlying demand."
Regarding the company's short term outlook, Fishman added: "The third quarter results were mostly influenced by what we believe were temporary issues. That being said, we are concerned that growing uncertainty about the global economy could cause our customers to become more cautious in the short term and that could reduce our revenue in the fourth quarter. This is, of course, difficult to precisely forecast. Therefore, our guidance for the fourth quarter has a wider range than is typical for ADI."
Given these factors, the company expects revenue for the current quarter to be between $715 and $755million, flat to down 6% sequentially.
"While the significant swings in customer supply chain management in 2011 have caused short term quarterly variations in our results, we believe the company is performing well against its overall objectives for the fiscal year," concluded Fishman. "At the midpoint of our fourth quarter outlook, we expect that ADI will grow revenue approximately 9% this year to more than $3billion, in line with our long term model."
