Analog Devices soars on 4Q earnings, outlook

Analog Devices moved up $7.19, or 13 percent, to $62.69 Wednesday after it easily topped analysts' estimates in its fourth quarter.

Analog Devices (NYSE: ADI) returned a profit of $206.5 million, or 54 cents a share, on sales of $806 million.

First Call Corp. consensus expected the chipmaker to earn 50 cents a share in the quarter.

The $806 million in sales represents an 87 percent improvement from the year-ago quarter when it pocketed $73.2 million, or 20 cents a share, on sales of $431 million.

On Wednesday, Chase H&Q reiterated its "strong buy" rating on the stock and set a 12-month price target of $110 a share.

"Analog Devices experienced an exceptionally strong fourth quarter, well ahead of the expectations we communicated at the time of our third-quarter release," said CEO Jerald Fishman in a prepared release. "Demand continued strong throughout the quarter, with our production levels rising in response to demand."

ADI said that it plans to repurchase up to 15 million shares of the company's stock in the next year.

For the fiscal year, it earned $588.8 million, or $1.54 a share, on sales of $2.57 billion, up from a profit of $204.8 million, or 57 cents a share, on sales of $1.45 billion in fiscal 1999.

In the quarter, Analog Devices recorded gross profit margins of 58.6 percent. Sales of its DSP chips shot up 115 percent from the year-ago quarter while analog devices improved 68 percent.

Looking ahead, company officials said it expects sales to improve 7 percent to 10 percent sequentially in the first quarter and earnings should come in around 58 cents to 60 cents a share.

"Furthermore, we believe our revenue growth is likely to be constrained by supply, not demand," Fishman said in the release.

For fiscal 2001, it expects at least 50 percent sales growth from the $2.57 billion it recorded this year.

Last quarter, Analog Devices plowed past analysts' estimates, earning $164.5 million, or 43 cents a share, on sales of $701 million.

The stock moved up to a 52-week high of $103 in August after falling to a low of $27.06 last November.

Sixteen of the 18 analysts tracking the stock rate it either a "buy" or "strong buy."

First Call Corp. consensus expects it to earn $2.41 a share in fiscal 2001.