The 10-second takeaway
For the quarter ended Jan. 1 (Q2), Linear Technology met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly, and earnings per share dropped significantly.
Margins shrank across the board.
Linear Technology logged revenue of $294 million. The 20 analysts polled by S&P Capital IQ expected a top line of $293 million. Sales were 23% lower than the prior-year quarter's $384 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.39. The 16 earnings estimates compiled by S&P Capital IQ averaged $0.39 per share on the same basis. GAAP EPS of $0.38 for Q2 were 39% lower than the prior-year quarter's $0.62 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 74.9%, 360 basis points worse than the prior-year quarter. Operating margin was 45.2%, 720 basis points worse than the prior-year quarter. Net margin was 29.9%, 760 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $302 million. On the bottom line, the average EPS estimate is $0.41.
Next year's average estimate for revenue is $1.2 billion. The average EPS estimate is $1.75.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 725 members out of 759 rating the stock outperform, and 34 members rating it underperform. Among 302 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 295 give Linear Technology a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Linear Technology is hold, with an average price target of $31.53.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Linear Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.