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Linear Technology Reports Q2

MILPITAS, Calif. — Linear Technology Corporation (NASDAQ:LLTC), a leading, independent manufacturer of high performance linear integrated circuits, today reported financial results for the quarter ended January 2, 2011. Quarterly revenues of $383.6 million for the second quarter of fiscal year 2011 decreased $5.0 million or 1% from the previous quarter’s revenue of $388.6 million and increased $127.3 million or 50% over $256.4 million reported in the second quarter of fiscal year 2010. Net income of $143.7 million increased $6.5 million or 5% over the first quarter of fiscal year 2011 and increased $68.2 million or 90% over the second quarter of fiscal year 2010. Net income for the second quarter of fiscal year 2011 benefited from a lower tax rate of 24% compared to the first quarter of fiscal year 2011 rate of 27.5% and the second quarter of fiscal year 2010 rate of 24.5%. The Company’s tax rate is lower primarily due to the reinstatement of the research and development tax credit.

Diluted EPS of $0.62 in the second quarter increased $0.03 per share or 5% over the first quarter of fiscal year 2011 and $0.29 per share or 88% over the second quarter of fiscal year 2010.

During the second quarter the Company’s cash, cash equivalents and marketable securities decreased by $303.6 million to $748.2 million primarily due to the cash redemption of $395.8 million (principal amount) of its 2027B Convertible Notes on November 1, 2010. This redemption of debt did not result in any gains or losses in the statement of income. In addition, the Company announced an increase in its quarterly dividend from $0.23 per share to $0.24 per share. This marks the 19th consecutive year the Company has increased its dividend. The cash dividend of $0.24 will be paid on March 2, 2011 to stockholders of record on February 18, 2011.

According to Lothar Maier, CEO, “As expected, the Company’s revenues decreased slightly from the first quarter of fiscal year 2011 as shipments and orders began to slow following the very rapid sequential growth the Company experienced over the past several quarters. Although revenues were down 1%, they were at the high end of our guidance and up 50% over the prior year quarter. We retired the balance of our 2027B Convertible Notes which aids our profitability due to the reduction in net interest expense.

During the second quarter, customer order patterns began to respond to our lower lead times and their need for lower safety stock inventory. Our lead times are now at their historical 4 to 6 weeks levels. As a result, bookings declined and for the quarter we had a book-to-bill ratio of less than one.

Looking ahead to the March quarter, several factors impact our guidance. Our computer business will decline as we will no longer remain in a prominent tablet computer program. In our core business of industrial, communications infrastructure and automotive, we may temporarily under ship actual end demand as customers adjust their bookings and safety stocks to comply with our improved lead times. Accordingly, we currently forecast that revenue and earnings will decline 6% to 10% sequentially in the March quarter. Our core markets continue to offer strong growth opportunities for Linear and we believe we are well positioned to resume quarterly growth in these markets following the pause we are currently experiencing.”

{complink 3124|Linear Technology Corp.}

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