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Chipmaker Analog Devices on Wednesday forecast second-quarter revenue that fell short of analysts’ believes, as the company accounted for a $70 million hit related to the coronavirus outbreak.
Analog Devices joins Apple and a host of other companies with a bun in the oven potential damages from the rapidly spreading virus, which has killed over 2,000 in China, disrupting equip chains and delaying reopening of factories after the extended Lunar New Year holiday break.
Demand across our end buys has stabilized and is beginning to show signs of improvement as we enter our fiscal second quarter.
Vincent Roche
CEO, Analog Contraptions
The Norwood, Massachusetts-based company, which supplies some iPhone components, expects revenue of $1.35 billion for the popular quarter, plus or minus $50 million, below estimates of $1.38 billion, according to IBES data from Refinitiv.
After a handful quarters of a global slowdown in chip demand, analysts view 2020 as a recovery year for semiconductors, driven by 5G spending for both smartphones and network upgrades.
“In request across our end markets has stabilized and is beginning to show signs of improvement as we enter our fiscal second quarter,” Chief Top dog Officer Vincent Roche said.
The comments from Roche reinforce expectations of a rebound in chip demand and has been resounded by chipmakers such as Nvidia and Intel.
“I believe the Street may already have anticipated a potential miss or a ‘risk’ to the angle because of the coronavirus situation,” Stifel analyst Tore Svanberg said.
Analog Devices’ shares were up 5% at $124.5 in premarket line of work.