Analog Devices (ADI)
Q1 2011 Earnings Call
February 15, 2011 5:00 pm ET
David Zinsner - Chief Financial Officer and Vice President of Finance
Mindy Kohl - Director of Investor Relations
Jerald Fishman - Chief Executive Officer, President and Director
Shawn Webster - Macquarie Research
David Wong - Wells Fargo Securities, LLC
Uche Orji - UBS Investment Bank
Stacy Rasgon - Bernstein Research
Jonathan Smigie - Raymond James & Associates
Christopher Danely - JP Morgan Chase & Co
Craig Ellis - Caris & Company
Kate Kotlarsky - Goldman Sachs Group Inc.
Doug Freedman - Gleacher & Company, Inc.
Previous Statements by ADI
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Thanks, Michael, and good afternoon, everyone. This is Mindy Kohl, Director of Investor Relations. We appreciate you joining us for today's call. If you haven't yet seen our first quarter fiscal 2011 release, you can access it by visiting our website at www.analog.com and clicking on the headline on the Home page.
This conference call is also being webcast live. From analog.com, select Investor Relations, and follow the instructions shown next to the microphone icon. A recording of this conference call will be available today within about two hours of this call's completion and will remain available via telephone playback for one week. This webcast will also be archived at our IR website.
Participating in today's call are Jerry Fishman, President and CEO; and Dave Zinsner, Vice President of Finance and CFO. During the first part of today's call, Jerry and Dave will present our first quarter 2011 results as well as our short-term outlook. The remainder of the time will be devoted to answering questions from our analyst participants.
During today's call, we may refer to non-GAAP financial measures that have been adjusted for certain nonrecurring items in order to provide investors with useful information regarding our results of operations and business trends. We have included reconciliations of these non-GAAP measures to their most directly comparable GAAP measures in today's earnings release, which is posted on the IR website. In addition, we have updated the schedules on our IR website, which includes the historical, quarterly and annual summary P&L for continuing operations as well as historical, quarterly and annual information for revenue from continuing operations by end market and by product type.
Next, I'd ask you to please note that the information we're about to discuss includes forward-looking statements, which include risks and uncertainties. Our actual results could differ materially from those we will be discussing. Factors that could contribute to such differences include, but are not limited to, those described in our SEC filings, including our most recent quarterly report on Form 10-Q.
The forward-looking information that is provided on this call represents our outlook as of today, and we do not undertake any obligation to update the forward-looking statements made by us. Subsequent events and developments may cause our outlook to change. Therefore, this conference call will include time-sensitive information that may be accurate only as of the day of the live broadcast, which is February 15, 2011.
With that, I'll turn it over to our CEO, Jerry Fishman.
Well, good afternoon, and thanks for joining us on the first quarter conference call. The first quarter for ADI was another very good quarter across virtually every dimension. Despite fears of a possible very significant inventory correction and the continued economic uncertainty in many regions of the world, our revenue for the first quarter was at the levels that we had predicted three months ago, and the trends within each end market were mostly also right on target. Specifically, our revenues in the first quarter were $729 million, which were up 21% year-over-year and down about 5% sequentially, which was slightly above the midpoint of the guidance we provided last quarter.
Our order trends during the quarter were very typical of what we experienced in the first fiscal quarter of our fiscal years. We saw some weakness in late November and December, consistent with the holiday-related shutdowns of our customers and also, of course, some inventory reductions, which was followed by a strong January.
For the quarter, our book-to-bill ratio was approximately one, and our backlog increased slightly entering the second quarter. In addition, the order levels from our OEM customers increased from fourth quarter levels indicating that business conditions are stabilizing and in some cases improving. Clearly, we did not see this significant inventory correction at ADI that we all feared. We believe this was a direct result of our manufacturing strategy, which kept lead times short through the entire cycle and kept inventory levels at our distributors within historical norms.
Customers were confident in our ability to deliver and as a result, there was little excess inventory in the supply chain. In addition, feedback from many of our largest customers indicates that they are optimistic about their business going forward, and their inventories appear to be in good control. Those comments in the recent order trend that we've seen provide us some comfort that we can achieve sequential revenue growth in the second fiscal quarter and hopefully, we can continue to see strength for the balance of the year.
So now I'll turn the call over to Dave, who is going to provide you some more details about our financial results.