Linear Technology Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Linear Technology (NASDAQ:LLTC) will unveil its latest earnings tomorrow, Tuesday, January 15, 2013

Linear Technology Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 40 cents per share, no change from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 45 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 40 cents during the last month. Analysts are projecting profit to rise by 1.1% versus last year to $1.74.

Past Earnings Performance: Last quarter, the company saw net income of 46 cents per share versus a mean estimate of profit of 46 cents per share. This comes after two consecutive quarters of exceeding expectations.

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Stock Price Performance: Between October 12, 2012 and January 9, 2013, the stock price rose $4.44 (14.1%), from $31.51 to $35.95. It saw one of its worst periods between May 8, 2012 and May 18, 2012 when shares fell for nine straight days, dropping 7% (-$2.17) over that span. The stock price saw one of its best stretches over the last year between December 3, 2012 and December 12, 2012, when shares rose for eight straight days, increasing 4.5% (+$1.48) over that span.

Wall St. Revenue Expectations: Analysts are projecting a rise of 5.5% in revenue from the year-earlier quarter to $310.5 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 8.1 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company regressed in this liquidity measure from 8.83 in the fourth quarter of the last fiscal year to the last quarter driven in part by an increase in liabilities. Current liabilities increased 17.5% to $200.4 million while assets rose 7.9% to $1.62 billion.

Key Stats:

On the top line, the company is looking to build on last quarter’s revenue increase, which snapped a string of revenue drops. Revenue fell 23.3% in the second quarter of the last fiscal year, 11.6% in the third quarter of the last fiscal year and 8% in the fourth quarter of the last fiscal year before climbing in the first quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 26.7% over the past four quarters.

A Look Back: In the first quarter, profit fell 3% to $105.2 million (45 cents a share) from $108.4 million (47 cents a share) the year earlier, meeting analyst expectations. Revenue rose 1.6% to $335.1 million from $329.9 million.