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Monday, November 24, 2008

Analog Devices (ADI) guides down 20%

Street mean has down 8% modeled. Gross margins are targeted to 57% for next quarter, the street is using closer to 60%.

It shouldn't be a giant surprise that an analog player is guiding lower. What's a little different is that ADI doesn't have the same channel dynamic -- they recognize on sell-through not sell-in. This suggests major cutbacks from OEMs in orders -- which we know, but part of the dramatic weakness at the analog companies was attributed to poor credit conditions for the analog distributors. The weakness is flowing straight through from OEMs it would seem.

My friend Helene Meisler at often talks about ADI's tendency to lead the semiconductor index so I'll be paying a lot of attention to how it acts in the next few days.

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