Chip designer Analog Devices Inc. on Tuesday reported a 53 percent drop in third-quarter profit as sales fell, as businesses curbed technology spending amid the recession.
But results still topped Wall Street expectations, and the company forecast fourth-quarter revenue above analysts' average estimate, saying business is showing improvement.
The company earned $65.5 million, or 22 cents per share, down from $138.6 million, or 47 cents, in the same quarter a year earlier. Revenue fell by 25 percent to $492 million.
Analysts, on average, had expected earnings of 20 cents per share on revenue of $479.6 million, according to Thomson Reuters.
"There are near-term indications that business conditions are improving," said President and CEO Jerald G. Fishman, in a statement. "Order rates strengthened throughout the third quarter and have remained strong during the first two weeks of August."
Fishman also said order rates from industrial customers began to improve as inventory reductions subsided.
Revenue in the third quarter rose by 4 percent from the second quarter, with strength in automotive and consumer end markets. The third-quarter's book-to-bill ratio was above one _ meaning demand is greater than supply _ and the opening backlog for the fourth quarter increased.
For the fourth quarter, Analog Devices is forecasting earnings from continuing operations between 24 cents and 26 cents per share on revenue of $510 million to $530 million. Analysts have predicted profit of 24 cents per share on sales of $498.3 million.
The company also declared a cash dividend of 20 cents per common share, to be paid on Sept. 16 to shareholders as of Aug. 27.
Shares of Norwood, Mass.-based Analog Devices fell $1.42, or 5.2 percent, to $25.80 in after-hours trading, having closed earlier up 46 cents at $27.22.
