Chipmaker Analog Devices (ADI) announced a second-quarter profit and revenue forecast below estimates on Wednesday, attributing the outlook to uncertain demand in the industrial and automotive sectors.
This projection comes on the heels of a weak forecast from Texas Instruments (TXN) last month, reflecting broader challenges within the chip industry. As businesses clear excess inventory accumulated during the pandemic-induced demand surge, uncertainty prevails.
CEO Vincent Roche expressed expectations for customer inventory stabilization in the second quarter, anticipating a more favorable business environment in the latter half of the year.
Analog Devices anticipates second-quarter revenue of $2.10 billion, plus or minus $100 million, falling short of analysts’ average estimate of $2.36 billion. Adjusted profit per share is projected to be $1.26, plus or minus 10 cents, below estimates of $1.56.
The company’s industrial unit, constituting nearly 50% of revenue, experienced a 31% decline in the first quarter due to ongoing supply imbalances. Growth in the automotive sector also decelerated to a near-two-year low of 9%, influenced by reduced chip orders amidst high interest rates affecting vehicle demand.
