News

Linear Technology Reports Increases in Revenue and Net Income

October 19, 2014 by Jeff Shepard

Linear Technology Corporation today reported quarterly revenues of $371.1 million for the first quarter of fiscal year 2015, ended September 28, 2014, increased $5.6 million or 1.5% over the previous quarter's revenue of $365.4 million and increased $30.7 million or 9.0% over $340.4 million reported in the first quarter of fiscal year 2014. Net income of $129.5 million decreased $0.3 million from the fourth quarter of fiscal year 2014 and increased $21.6 million or 20.0% over the first quarter of fiscal year 2014. First quarter net income and earnings per share were negatively impacted by a higher effective income tax rate of 26% that more than offset the benefit of lower interest expense that resulted from the extinguishment of the Convertible Senior Notes at the end of fiscal 2014. Diluted earnings per share of $0.53 per share in the first quarter of fiscal year 2015 was flat compared to the fourth quarter of fiscal year 2014 and increased $0.08 per share or 18% over the first quarter of fiscal year 2014.

Our cash, cash equivalents and marketable securities increased by $14.9 million over the fourth quarter of fiscal year 2014 to $1,028 million. A cash dividend of $0.27 per share will be paid on November 26, 2014 to stockholders of record on November 14, 2014. During the first quarter the Company generated positive cash flows from operations of $136.4 million or 36.8% of total revenues. The Company has historically generated strong cash flows from its operations.

During the first quarter of fiscal year 2015 the Company returned $99.8 million to shareholders in the form of dividends of $65.7 million, representing $0.27 per share and stock purchases of $34.1 million. The Board of Directors authorized the Company to purchase, depending on market conditions, up to 10 million shares of its outstanding common stock in the open market over the next two years.

According to Lothar Maier, CEO, “For our first fiscal quarter, we grew revenue $5.6 million which approximated the midpoint of our guidance, of 1% to 3%, and represented 9% growth over the similar quarter in the prior year. Operating income grew in concert with sales and remained an industry leading 47% of sales. Bookings were down from the prior quarter while our book to bill ratio was only modestly negative. Seasonally this is typical performance for us as our major end markets, industrial and automotive, generally experience some softness in the summer and fall, but show strength in the first half of the calendar year. The industrial end-market was 43% of our business, down from 44% last quarter whereas automotive at 19% was similar to last quarter.

“Looking forward, revenue in the December quarter is typically down from the September quarter, averaging down sequentially 6% over the past four years. Based upon this and our current bookings rate, we are forecasting revenue to be down 3% to 6% sequentially though up year over year in the 4% to 8% range. Overall, we remain optimistic about the increased electronics content in our end markets, especially automotive and industrial.”