Analog Devices Inc. (NASDAQ: ADI) reported a 10% increase in revenue for the second quarter of 2021, beating analysts’ estimates. However, the chipmaker’s shares dropped nearly 8% after the company forecasted lower-than-expected third-quarter revenue and profit.
The company expects third-quarter revenue of $3.10 billion, plus or minus $100 million, and adjusted profit of $2.52 per share, plus or minus 10 cents. This is below analysts’ estimates of $3.16 billion and $2.65 per share, respectively.
The chip industry is struggling to shake off a slump that has led to a pile-up of inventory, and Analog Devices is no exception. CEO Vincent Roche said, “Looking to the second half, we expect revenue to moderate given the continued economic uncertainty and normalizing supply chains.”
Despite the gloomy outlook, Analog Devices saw resilient demand from the industrial and automotive sectors, with revenue from the industrial segment rising 16% and the automotive segment’s revenue increasing 24%. The company also announced plans to invest 630 million euros ($678.8 million) in a new research and development and manufacturing plant in Ireland.
Prashanth Mahendra-Rajah will step down as finance chief at the end of the fiscal year. The company’s shares were down 7.9% at $173.04 on Wednesday.