Linear Tech reports Sequential and Year-to-Year Revenue and Income Growth

Linear Technology Corporation today reported financial results for the fiscal quarter ended March 30, 2014. Quarterly revenues of $348.0 million for the third quarter of fiscal year 2014 increased $13.4 million or 4.0% over the previous quarter's revenue of $334.6 million and increased $33.5 million or 10.6% over $314.5 million reported in the third quarter of fiscal year 2013. Net income of $117.6 million increased $12.9 million or 12.3% over the second quarter of fiscal year 2014 and increased $6.6 million or 6.0% over the third quarter of fiscal year 2013. Diluted earnings per share of $0.48 per share in the third quarter of fiscal year 2014 increased $0.04 per share or 9.1% over the second quarter of fiscal year 2014 and increased $0.02 per share or 4.3% over the third quarter of fiscal year 2013.

Net income for the third quarter fiscal 2014 benefited from a lower tax rate of 21% compared to the second quarter of fiscal 2014 rate of 25% due primarily to the release of estimated tax liabilities for fiscal years that are no longer subject to audit. The prior year quarter had a lower tax rate of 12.75% due to the reinstatement of the federal R&D tax credit and secondarily due to the release of estimated tax liabilities for fiscal years that are no longer subject to audit.

According to Lothar Maier, CEO, “After the slight decline we experienced last quarter, we are pleased to report that the bookings momentum that occurred at the end of our second quarter continued through the third quarter. As a result, we grew revenues 4% sequentially and 10.6% year-over-year. The book-to-bill ratio was positive for the quarter and bookings increased sequentially in all of our major markets, with the automotive, industrial and communications markets showing the most gains. Looking forward, we are encouraged by our current bookings momentum and the breadth of the bookings across our major markets. Accordingly, we are currently estimating sequential revenue growth of 2% to 6% for our fiscal fourth quarter. The redemption of our convertible notes will favorably impact our profitability going forward as interest expense related to the notes will terminate. Shares of common stock will increase modestly to reflect the anticipated premium the notes will have earned.”

During the third quarter the Company's cash, cash equivalents and marketable securities increased by $45.1 million over the second quarter of fiscal year 2014 to $1,763 million net of spending $10.9 million to purchase approximately 242,000 shares of its common stock in the open market. A cash dividend of $0.27 per share will be paid on May 28, 2014 to stockholders of record on May 16, 2014. Additionally, we announced earlier this month that the Company has called for redemption effective May 1, 2014 all of its outstanding Senior Convertible Notes with a principal balance of $845 million. The face value of the Notes will be paid with internally generated cash, with any conversion premium paid in shares of our common stock.