Chip vendor Analog Devices Inc. Tuesday (Aug. 16) reported sales and profit for the quarter ended July 1 that fell short of analysts' expectations, with the company's CEO expressing concern about growing uncertainty about the global economy. 

ADI (Norwood, Mass.) reported sales for the quarter of $758 million, down 4 percent from the previous quarter and up 5 percent compared to the year-ago quarter. The company posted a net income in accordance with generally accepted accounting principles (GAAP) of $219.9 million, or 73 cents per share, down 9 percent from the previous quarter but up 10 percent from the year-ago quarter.

"After an unusually robust second quarter in which our revenue grew by 9 percent sequentially, revenue in the third quarter declined by 4 percent on a sequential basis while increasing 5 percent year-over-year," said Jerald Fishman, ADI's president and CEO, in a statement. "Nevertheless, most end markets remained relatively stable during the third quarter and we believe that most of the revenue shortfall was the result of supply chain recalibration, not a change in underlying demand."

On a non-GAAP basis, excluding charges, ADI reported diluted earnings per share of 71 cents for the quarter, down from 75 cents in the previous quarter but up from 65 cents in the year-ago quarter.

Consensus analysts' expectations called for ADI to report sales for the quarter of about $780.5 million and non-GAAP earnings per share of 74 cents, according to Yahoo Finance.

ADI's gross margin for the quarter was 67.2 percent of revenue, ADI said, down from 67.6 percent in the previous quarter but up from 66.7 percent in the year-ago quarter.

At the end of the quarter, ADI's inventory was up by $6 million, or 2 percent compared to the previous

quarter, ADI said. Days of inventory was 110 days at the end of the quarter, compared to 104 days at the end of the previous quarter, ADI said. 

Fishman said ADI's sales shortfall for the fiscal third quarter was mostly influenced by what company executives believe are temporary issues. "That being said, we are concerned that growing uncertainty about the global economy could cause our customers to become more cautious in the short term and that

could reduce our revenue in the [fiscal] fourth quarter," Fishman said.

ADI expects revenue for the current quarter to be between $715 million and $755 million, flat to down 6 percent sequentially. The company said it expects to report diluted earnings per share of 60 to 68 cents for the quarter.

According to Yahoo Finance, consensus analysts' expectations had called for ADI to report sales for the fiscal fourth quarter of about $784 million.

"While the significant swings in customer supply chain management in 2011 have caused short-term quarterly variations in our results, we believe the company is performing well against its overall objectives for the fiscal year," Fishman said.

If ADI hits the midpoint of its guidance for the fiscal fourth quarter, the company expects to grow sales 9 percent in 2011 compared to 2010, reaching more than $3 billion, Fishman said.