Maxim, Analog Devices Enjoy Good News From Linear

Includes: ADI, LLTC, MXIM
by: Eric Savitz

Linear Technology (NASDAQ:LLTC) reported revenue for the fiscal third quarter ended April 1 of $255 million, a bit above the Street consensus of $253.98 million; EPS of 32 cents a share was in line with expectations.

Linear also said that “inventory in the marketplace appears to be more balanced than in previous quarters,” but that “visibility continues to be low and customers remain guarded in their forecasting and inventory management.”

For the fiscal fourth quarter, the company sees revenue up 3%-6% sequentially, which suggests revenue of $262.65 million to $267.75 million; the Street has been looking for $263.72 million (Wall Street tends to use the midpoint when given that kind of range; a 4% rise would be $265.2 million, which would suggest the Street will boost its forecasts).

Meanwhile, the company also said it plans an “accelerated stock repurchase transaction” to buy back $3 billion of its common stock; that would be more than 30% of the company’s market capitalization (the company closed the regular session with a market cap of $9.6 billion). The company will fund the transaction with existing cash and a $1.7 billion convertible note offering.

Linear shares have jumped $3.11, or 9.7% after hours, to $35.20. Meanwhile, shares of other linear semiconductors are also getting a lift on the news: Maxim (NASDAQ:MXIM) was up $1.51 at $30.61 while Analog Devices (NASDAQ:ADI) was up 77 cents at $37.

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