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ADI View on Low Side

By Alexei Oreskovic
TheStreet.com Senior Writer
5/22/2007 4:37 PM EDT

http://www.thestreet.com/_yahoo/newsanalysis/techsemis/10358368.html?cm_ven=YAHOO&cm_cat=FRE...

Analog Devices (ADI - Cramer's Take - Stockpickr - Rating) saw its profit narrow in the second quarter, and served up guidance that was at the low end of Wall Street expectations.
Shares of ADI lost 5.7%, or $2.32, to $38.10 in extended trading Tuesday.

The Norwood, Mass.-based chipmaker said sales in the three months ended May 5 totaled $669 million, up 4% year-over-year, and above the average analyst expectation of $659 million.

ADI earned $125 million, or 37 cents a share, vs. the $146 million profit it recorded at this time last year. Excluding stock compensation expenses and restructuring charges, ADI said it earned 40 cents a share.

It was not immediately clear whether the average analyst expectation of 35 cents a share included any of these items.

"ADI had a very good second quarter as the strong demand we began to see in January continued through the quarter," CEO Jerald Fishman said in a statement.

But ADI's outlook for the current quarter left something to be desired.

The company forecast a third-quarter sales range of $655 million to $685 million, barely hitting the average Thomson First Call analyst expectation of $683.5 million.

EPS will range between 33 cents and 37 cents, or between 37 cents and 41 cents excluding certain items. Analysts expected ADI to earn 40 cents a share.