FILE PHOTO: Analog Devices' logo is pictured on a smartphone in front of the stock graph displayed in this illustration taken, December 4, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) -Analog Devices forecast third-quarter revenue above analyst expectations on Thursday, but a projected sequential decline in the automotive segment sent shares down 5%, as the chipmaker pinned demand in the unit to tariff-linked pull-ins.
Demand for some semiconductors has benefited in the near term as manufacturers pull shipments forward amid shifting U.S. tariff policies.
Analog Devices projected third-quarter revenue of $2.75 billion, plus or minus $100 million, above the estimate of $2.62 billion, according to data compiled by LSEG, but expects sales in the key auto segment to decline quarter-on-quarter.
Sales in the automotive unit rose 24% to $849.5 million in the May quarter, which the company attributed partly to accelerated demand ahead of tariffs during a post-earnings call.
"Given some volatility..., we do think our auto results were aided by pull-in activity," a company executive said.
"While it's difficult to delineate what was pull-in versus normal, our estimate for pull-in upside is in the high-single digit range."
Peer Texas Instruments also forecast second-quarter revenue above the Wall Street estimate last month, as companies are seeing a revival in analog chip demand after several quarters of clearing pandemic-era inventory.
"Inventory had been really drawn down, so now we are seeing a restocking," said Lou Miscioscia, an analyst at Daiwa.
However, demand in the auto segment being driven by tariff activity could cast a shadow over the possibility of a sustainable recovery.
"Investors got spooked by their comments on some pull-ins related to tariffs in the automotive part," said Tore Svanberg, senior analyst at Stifel.
Sales at the consumer unit, which features chips for personal electronics, rose 30%.
Global shipments of personal computers rose 9.4% in the first quarter as PC makers boosted consignments in anticipation of tariffs, according to data from research firm Canalys.
The company also forecast adjusted per-share earnings of $1.92, plus or minus 10 cents, which is above estimates.
(Reporting by Meghana Khare in Bengaluru; additional reporting by Arsheeya Bajwa; Editing by Leroy Leo and Vijay Kishore)
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