Analog Devices (NYSE:ADI) surged to a 52-week high Monday, but the shares slipped after revealing late Monday a soft first-quarter outlook.
Higher sales and tighter expenses helped ADI achieve a stronger-than-expected fourth-quarter profit.
The Norwood, Mass-based company posted net income of $224.99 million, or 73 cents a share, compared with $105.61 million, or 36 cents a share, in the same quarter last year, beating the Streetâ€™s view of 70 cents.
Revenue for the maker of analog, mixed-signal and digital signal processing integrated circuits was $770 million, up 35% from $571.6 million a year ago, ahead of average analyst estimates polled by Thomson Reuters of $755.81 million.
Earnings were cushioned by tighter expenses, only marginally higher at $230 million compared with the year-earlier period.
â€śThe fourth quarter culminated a very strong year for ADI in which we achieved record revenue, profitability, and cash flow,â€ť ADI CEO Jerald G. Fishman said in a statement.
â€śFor fiscal year 2010, revenue increased 37% and earnings nearly tripled,â€ť a reflection of a stronger market, and the companyâ€™s multi-year refocus on certain innovative products, he said.
Last quarter, ADI was able to increase its gross margin to 65.2%, compared with 55.5% in the same quarter last year, driven primarily by strong sales growth, lower manufacturing costs and increased factory utilization.
Customer end bookings were lower-than-expected, as customers began to lower their inventories in response to shortened industry lead times. Softer orders in August and September were offset by strong orders in October.
The companyâ€™s board of directors declared a quarterly cash dividend of 22 cents a share, to be paid on Dec. 22 to shareholders of record at the close of business on Dec. 3. The board has also authorized the repurchase of an additional $1 billion of common stock under ADIâ€™s existing program.
Looking ahead, the company expects fiscal 2011 first-quarter earnings in the range 63 cents to 67 cents a share on revenue of $715 million to $740 million, which would be down 4% to 7% sequentially.
â€śOverall, customer feedback indicates that end demand remains strong in most end markets,â€ť Fishman said.