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The Milpitas, California-based company reported net income for the third quarter of $60.69 million or $0.27 per share, a sharp decline from $102.31 million or $0.45 per share in the year-ago quarter.
Net income for the quarter included a $7.2 million or $0.02 per share of non-cash interest expense related to the amortization of the debt discount on the company's convertible senior notes.
In addition, during the first quarter of fiscal 2010 the company adopted EITF 03-6-1 which caused shares used in the earnings per share calculation to increase by about 4.0 million shares or $0.005 per share to include non-vested restricted stock grants that receive a dividend. Earnings per share were also negatively impacted by the return of the company's quarterly tax rate to 28% as compared to the previous quarter's tax rate of 21%, which was favorably impacted by discrete items.
Excluding items, the company's first quarter non-GAAP net income fell to $78.48 million or $0.34 per share from $119.47 million or $0.52 per share in the same quarter last year.
On average, twenty one analysts polled by Thomson Reuters expected the company to earn $0.24 per share for the quarter. Analysts' estimates typically exclude special items.
In the preceding third quarter, Linear Technology's net income plunged to $56.23 million or $0.25 per share from $103.15 million or $0.46 per share in the same quarter last year. On an adjusted basis, net income for the quarter decreased to $69.16 million or $0.31 per share from $114.40 million or $0.51 per share a year ago.
Revenues for the quarter decreased 24% to $236.14 million from $310.35 million in the prior-year quarter, however, came in above Street estimates of $215.87 million.
For the sequentially preceding quarter, revenues were $208.02 million, down from $307.08 million in the same quarter a year ago.
The company noted that bookings for the quarter grew in all of its major end-markets, except cell phones, and the largest increases were in the automotive and industrial end-markets.
Cost of sales for the quarter under review decreased to $59.58 million from $71.47 million in the year-ago quarter. Operating income for the quarter dropped sharply to $99.55 million from $150.91 million in the corresponding quarter last year.
Expenses for the quarter eased to $77.00 million from $87.97 million last year. Research and development expenses for the quarter were $45.34 million, compared to $50.86 million last year, while selling, general, and administrative expenses were $31.66 million, compared to $37.11 million in the year-ago quarter.
Lothar Maier, chief executive officer, Linear Technology commented "We were pleased by the acceleration of customer orders during the latter half of the quarter as each of our end-markets except cell phone improved, in particular the automotive and industrial markets. As a result, revenues significantly improved over the previous quarter as we grew sales 14%, beating the top end of our guidance. In addition, our operating income grew by 26% and now represents 42% of sales."
Looking forward to the second quarter of 2010, the company said it remains cautious, since it believes financial effects of the global recession were not over and continues to impact many of its customers.
As a result of the strength of its positive book to bill ratio and the recovery it appears to be witnessing in its automotive and industrial end-markets, the company anticipates revenue growth for second quarter to be in the range of 2% to 5% over the first quarter.
Analysts currently expect revenues of $222.72 million for the second quarter of fiscal 2010.
LLTC closed Tuesday's regular trading at $28.49, down $0.14 or 0.9%, on a volume of 6.27 million shares. In after hours, the stock gained $0.51 or 1.79%, trading at $29.00. In the past 52 weeks, the stock trended in a broad range of $17.69 - $28.99, with a three-month average volume of 4.29 million shares.
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