Linear Technology Corp. (LLTC) reported first quarter 2011 diluted earnings of 67 cents per share (according to Non-GAAP figure provided by the company) beating Zacks Consensus estimate of 61 cents per share and also increasing 97.1% from year-ago quarter.
Linear Tech’s focus on traditional analog end-markets, which comprises of the industrial, automotive and communications, proved advantageous for achieving the results.
Quarter in Detail
Linear Tech achieved record quarterly revenues of $388.6 million increasing 6% sequentially and up 64.6% from the prior-year quarter. The company for the sixth consecutive quarter increased its revenues and this is the third consecutive quarter that the company has a record quarterly revenues.
Gross profit increased 72.7% to $304.9 million compared with the year-ago quarter and gross margin increased 3.7 percentage points to 78.5%.
Operating profit increased 105.6% to $204.6 million from prior-year quarter, and operating margin grew 10.6 percentage points to 52.7% compared with the same quarter last year. Net income increased 126.2% to $137.3 million from the year-ago quarter.
Increase in revenue of 64.6% outpaced the increase in cost of sales, which increased 40.4% on a year-over-year basis.
The company announced a cash dividend of 23 cents per share, which is to be paid on November 24, 2010 to stockholders of record on November 12, 2010.
Quarter Ahead
Linear Tech expects the revenue to be flat to down 4% sequentially in the next quarter. The company is also expecting to reduce interest expense by calling approximately $400 million of the Convertible Senior Notes on November 1, 2010.
Conclusion
Analyst estimates for the quarter have been going down over the past 30 days, with 2 analysts lowering estimates. The average estimate was 61 cents when the company reported earnings. We note that Linear Tech has consistently exceeded estimates over the past year or so. The average surprise in the preceding 4 quarters is a positive 12.1%, and another positive surprise was therefore expected.
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