Analog Devices Profit Tops Estimate; Boosts Dividend, Buyback

(RTTNews) - Chipmaker Analog Devices, Inc. (ADI) said Tuesday after the markets closed that its first quarter profit rose 16% from last year, helped by higher revenue and improved margins.

The company's quarterly earnings per share, excluding items, beat analysts' estimate by a penny, but its quarterly revenue fell shy of analysts' forecast. At the same time, the company gave a slightly downbeat outlook for the current quarter.

"Our first quarter unfolded as we had expected," said Vincent Roche, President and CEO. "We tightly managed operations and expenses, and kept factory utilizations low. Revenue from the end markets of industrial, communications infrastructure, and automotive totaled 88% of revenue in the aggregate."

The company also said that its board of directors has approved a 9% increase in its regular quarterly dividend, from $0.34 to $0.37 per share, payable on March 11 to all shareholders of record on February 28.

In addition, Analog Devices said its board has approved an increase to the company's share repurchase authorization to $1 billion. As of February 1, the Company had $443 million remaining under its previous authorization.

Analog Devices shares are currently gaining 0.76% in after hours trading after closing the day's regular trading session at $51.23, up 46 cents. The shares trade in a 52-week range of $41.81 to $51.34.

For the first quarter ended February 1, 2014, the Norwood, Massachusetts-based company reported net income of $152.6 million or $0.48 per share, compared to $131.2 million or $0.42 per share for the year-ago quarter.

Excluding items, adjusted earnings for the first quarter were $0.49 per share, compared to $0.44 per share in the prior year quarter.

On average, 27 analysts polled by Thomson Reuters expected the company to earn $0.48 per share for the first quarter. Analysts' estimates typically exclude special items.

Gross margin for the first quarter improved to 65.1% from 62.7% a year earlier. Operating margin for the quarter increased to 28.6% from 24.7% a year ago on a reported basis and improved to 29.0% from 26.9% last year on an adjusted basis.

Revenue for the first quarter rose 1% to $628.24 million from $622.13 million in the same quarter last year. Twenty-four analysts had a consensus revenue estimate of $628.85 million for the first quarter.

Looking forward to the second quarter, the company forecasts revenue of $660 million to $680 million and earnings of $0.54 to $0.58 per share. Analysts currently expect the company to earn $0.55 per share on revenue of $663.95 million for the fourth quarter.