Analog Devices Inc (ADI.N) continued to grapple with supply chain issues in the third quarter and the microchip maker said it expects the uncertain macroeconomic environment to hurt fourth-quarter revenue as customers cut down orders.
On a conference call with analysts, Norwood, Massachusetts-based Analog Devices said it expects revenue from its industrial business -- its biggest segment -- to fall sequentially as customers in the United States and Europe reduce orders.
"Our distributor inventory increased (for) a few days, and is now slightly above target levels. As a result, we expect distributors to reduce their inventory levels in the fourth quarter," the company said.
For the fourth quarter, the company, which counts Ericsson (ERICb.ST) and Nokia Siemens Networks NSN.UL among its customers, said it expects a profit of 60-68 cents a share from continuing operations, on revenue of $715-$755 million.
Analysts were looking for earnings of 72 cents a share, excluding items, on revenue of $778.4 million, according to Thomson Reuters I/B/E/S.
SUPPLY CHAIN HURTS Q3
The company posted third-quarter earnings of $219.9 million, or 71 cents a share, compared with $199.5 million, or 65 cents a share, in the year-ago period.
Revenue rose 5 percent to $757.9 million.
Analysts, on average, had expected earnings of 73 cents a share, excluding items, on revenue of $780.1 million.
"We believe that most of the decline in the third-quarter was the result of supply and inventory imbalance ... a portion of the revenue shortfall was the result of a few communications infrastructure customers delaying orders," the company said.
Shares of the company fell 3 percent in trading after the bell. They had closed at $31.35 on Tuesday on the New York Stock Exchange.