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ADI - Analog Devices Inc News Story

$148.88 4.4  3.0%

Last Trade - 05/03/21

Sector
Technology
Size
Large Cap
Market Cap £39.68bn
Enterprise Value £42.64bn
Revenue £4.23bn
Position in Universe 213th / 6651

Analog Devices shares dip as Huawei ban complicates 5G growth in China

Tue 24th November, 2020 7:16pm
By Stephen Nellis
    Nov 24 (Reuters) - Analog Devices Inc  ADI.O  on Tuesday
forecast fiscal first-quarter revenue that beat Wall Street
expectations, but the chipmaker's shares dipped as executives
said sales to Huawei Technologies Co Ltd would cease.
    For the quarter ending in December, ADI estimated a revenue
midpoint of $1.5 billion, beating analysts' expectations of
$1.42 billion, according to IBES data from Refinitiv.
    Shares dropped 1.4% after ADI announced the forecast with
its results, but pared losses to 0.42% at mid-afternoon.
    ADI chips are widely used in radio systems for 5G
telecommunications networks. Sales to Huawei, which had
accounted for about 2% to 3% of the total, will drop to zero
because U.S. government regulations have effectively blocked
almost all U.S. chip sales to the Chinese company, ADI officials
said.
    ADI Chief Executive Vincent Roche said in an interview the
company expected 5G network buildouts to grow again in China
sometime in the first half of calendar 2021, followed by new
U.S. rollouts later in 2021 and in Europe in 2022.
    "The buildout of 5G in China is going to take place with or
without Huawei. It's been declared that it's an essential piece
of infrastructure to keep modernizing the Chinese economy,"
Roche said. "There are two other very viable builders of 5G
equipment in China, and there are also Samsung and the
Europeans."
    For its fiscal fourth quarter, ADI reported revenue of $1.53
billion and adjusted earnings per share of $1.44, beating
analysts' expectations of $1.44 billion and $1.32 per share,
according to Refinitiv data.
    

 (Reporting by Stephen Nellis in San Francisco; Editing by
Richard Chang)
 ((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
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