Linear Technology Earnings Preview

Motley Fool Staff
Updated

Investors are on the edge of their collective seats, hoping that Linear Technology (NAS: LLTC) will top analyst expectations for the third consecutive quarter. The company will unveil its latest earnings Tuesday. Linear Technology offers a line of standard high performance linear integrated circuits.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Linear Technology with nine of 17 analysts rating it hold. Analysts don't like Linear Technology as much as competitor Maxim Integrated Products overall. Seven out of 19 analysts rate Maxim Integrated Products a buy compared with six of 17 for Linear Technology. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.

  • Revenue Forecasts: On average, analysts predict $332.9 million in revenue this quarter. That would represent a decline of 14.3% from the year-ago quarter.

  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.50 per share. Estimates range from $0.48 to $0.52.

What our community says:
CAPS All-Stars are solidly behind the stock with 98.1% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 95.8% granting it a rating of "outperform." Fools have embraced Linear Technology and haven't been shy with their opinions lately, logging 173 posts in the past 30 days. Even with a robust four out of five stars, Linear Technology's CAPS rating falls a little short of the community's upbeat outlook.

Management:
Linear Technology's profit has risen year over year by an average of 71.1% over the past five quarters. A year-over-year revenue decrease last quarter snaps a streak of three consecutive quarters of revenue increases.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q4

Q3

Q2

Q1

Gross Margin

78.0%

77.6%

78.5%

78.5%

Operating Margin

50.9%

50.7%

52.4%

52.6%

Net Margin

44.1%

40.1%

37.5%

35.3%

One final thing: If you want to keep tabs on Linear Technology movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time thisarticle was published

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