Revenue in its third
fiscal 2012 quarter fell 10%, to $683 million, but was up 1%
sequentially, which was still slightly lower than expected. Diluted
earnings per share of $0.56 was at the midpoint of its earlier guidance.
Revenue
in its consumer business was down 19%, while the communications
segment’s revenue fell 11%. The only segment to post year-over-year
gains was automotive, which saw a 12% jump in revenue.
Sequentially,
however, communications was the best performer, growing 9% sequentially
as the company’s exposure to wireless base stations in North America,
Asia and Japan drove the solid results. Automotive was down 3% as
European manufacturers reduced orders on macro concerns. And consumer
was up 1%, as strength in portable media was offset by weaker sales of
digital cameras.
The company expects the industrial, communications and automotive businesses to remain stable in the fourth fiscal quarter.
ADI
is bullish about the outlook in the wireless infrastructure portion of
its communications business as 4G LTE rolls out, although 3G will remain
the dominant technology for at least another two years. Automotive
safety applications, such as roll-over control and radar-based collision
avoidance systems, are also expected to be a growth area for ADI.
Fourth-quarter
guidance shows revenue estimates of between $685 million and $715
million. A large portion of that growth will be derived from a strong
product cycle in its consumer business as it grows its content in mobile
devices, particularly MEMS microphones. The company has increased
backlog to meet seasonal demand, as well as respond to a new product
cycle; consequently, inventory increased by 3%, or $8 million, with 121
days of inventory on hand. The company expects to bring inventory levels
back down to historical levels of 100 to 110 days by the end of its
first fiscal 2013 quarter.
As
inventories come down, capacity utilization rates will be in the high
60 percent rage compared with approximately 70 percent in the third
quarter. As a result, gross margins are expected to remain flat at 65
percent vs. 65.6 percent.
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