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ADI tops estimates, sees strong 3Q

Analog Devices (NYSE: ADI) reported second quarter earnings of 32 cents a share Wednesday, topping First Call's expectation of 29 cents a share as demand for its communications processors grew. The company also predicted strong third-quarter results, and raised its revenue estimates for the year.

Shares closed at 67 3/4 Tuesday. The company also beat estimates in its first quarter, and announced a stock-split to keep its rocketing shares affordable.

Diluted earnings of 32 cents a share were almost triple 11 cents a share for the year-ago quarter, and were up 28 percent from 25 cents a share for the first quarter this year.

Revenue of $581 million was up 71 percent from 1999's second quarter and 19 percent sequentially.

"The market shift from data processing to signal processing has created large opportunities for ADI's high-performance analog and DSP technology," said CEO Jerald G. Fishman in a company statement.

The company's analog revenue grew 57 percent year over year, while DSP revenue grew 134 percent year over and year. Sales into the communications market continued to accelerate, rising 123 percent over the same quarter last year and 29 percent from the prior quarter.

The company said it is also seeing strong growth in high-end digital entertainment products used in digital cameras, VCRs, DVD players and flat panel displays, areas where it has a high market share.

ADI also said a large backlog gives good visibility for 2000. Fishman expects third-quarter sales could rise 10 to 12 percent sequentially, putting third-quarter revenues between $640 million to $650 million and diluted earnings at about 36 to 37 cents a share.

The company said it has also revised revenue expectations for the year; year-over-year revenue growth could exceed 65 percent, bringing fiscal 2000 revenues to $2.4 billion, or about $1 billion more than for last year.

ADI's top competitors include Motorola (NYSE: MOT), Texas Instruments (NYSE: TXN) and STMicroelectronics (NYSE: STM).