By Micah Maidenberg
Analog Devices Inc. lowered its revenue outlook for its second quarter by $70 million due to the coronavirus outbreak, which has slowed economic activity in China and has been reported in other countries around the world.
The effects of the virus "are difficult to estimate and the situation remains dynamic," the chip maker said Wednesday.
Over all, Analog forecasts second-quarter revenue of $1.35 billion at the midpoint.
Analog has moved to build up its business in China. In 2017, the company acquired circuit maker Linear Technology Corp. in a deal valued at $15.8 billion, lifting revenue in the market for its subsequent fiscal year.
In its 2019 fiscal year, Analog generated $1.32 billion in revenue in China, up 8% over the comparable period and representing 22% of total revenue, according to the company's latest annual report.
Demand for communications products bolstered results in China in the 2019 fiscal year, Analog said.
The company on Wednesday reported $1.3 billion in revenue for its first quarter, which ended Feb. 1, down 15% compared with the comparable period a year earlier. Revenue was in line with forecasts from analysts polled by FactSet.
The Norwood, Mass.-based company said profit fell to $203.9 million, or 55 cents a share, from $355 million, or 95 cents a share, year over year. Analog's adjusted profit of $1.03 a share beat the consensus estimate for that metric by three cents.
Gross margins slipped to 65.1% from 67.5%.
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