Decreasing Net Income for Analog Devices

Analog Devices (NYSE: ADI) announced its results for the fourth quarter on November 21, 2011. Let's take a closer look at the company's industry, financials, and commentary and see what steps you can take next.

Earnings and Revenue:
Analog Devices fell short of estimates with EPS of 60 cents/share and revenues of $716 million. Analysts were expecting EPS of 63 cents/share and revenues of $730 million. Revenue fell 7% from the same period last year while EPS is down 18%.
With last quarter's falling profit, the company ends a run of four consecutive quarters of year-over-year profit increases. Slumping revenue in the last quarter ends Analog Devices' streak of four consecutive quarters of revenue increases.

Income:
Over the past year, Analog Devices reported net income of $2.72/share. The company trumped analyst projections of $2.67 by 1.9%. According to the reported number, the company's income fell 18.4% from last year's levels.

Conference Call:
The conference call for fourth quarter earnings can be accessed here.

Official Comment:
"We are very pleased with our fiscal year 2011 performance as ADI delivered record annual revenue and profitability, with revenue of approximately $3 billion, operating profit of approximately $1.1 billion, or 35.8% of revenue, and diluted EPS from continuing operations of $2.79. In addition, we generated strong free cash flow of $778 million, or 26% of revenue," said Jerald G. Fishman, President and CEO. "In the fourth quarter, our results declined, consistent with a general slowdown in the semiconductor industry, particularly in the industrial and communications markets. Nevertheless, during this period, the consumer end market showed seasonal growth and the automotive sector continued to be strong. During the fourth quarter, we also reduced production levels, which reduced both our internal and channel inventories despite lower revenue, and resulted in lower gross margins. In addition, we took steps to reduce discretionary spending, allowing us to produce strong profitability while continuing to invest in our key strategic programs."

Industry:
Analog Devices is in the semiconductors-analog and mixed industry. That industry is currently enjoying price/earnings growth of 2.2%.

What to Do Next:
Those are the latest numbers from Analog Devices, including how the announcement compared to Wall Street estimates. Benzinga consistently provides earnings previews and recaps for major corporate events. Be sure to visit us next quarter for a full Analog Devices preview.

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(Estimates Source: Zacks)