Pacific Crest downgraded Analog Devices (ADI) to sector perform.
Analyst Michael McConnell says the 43 cents third-quarter GAAP earnings per share missed his 44 estimate. He notes revenue grew in all product segments, but bookings fell estimated 27% sequentially to $575 million, yielding 0.8-1.0 book-to-bill.
McConnell says cancellations are most acute from digital-still camera makers in Japan and handset makers in China. He notes fourth-quarter guidance -- flat sequential revenue and earnings growth -- reflects customer caution over end-market demand. He says lower product lead times are ADI's increasing dependence on unpredictable turns order. He sees an inventory build.
McConnell cut the $1.59 fiscal 2004 (Oct.) earnings per share estimate to $1.54, and cut the $2.18 fiscal 2005 to $2.01.