Analog Devices (ADI) has forecasted lower-than-expected fourth-quarter revenue, but the company is working on managing the supply glut in order to accelerate growth in future quarters. While ADI’s shares initially fell over 6%, they later rose by about 1%. The chipmaker also missed third-quarter revenue and profit estimates, along with peers Texas Instruments, ON Semiconductor, and NXP Semiconductors. The semiconductor industry is currently grappling with excess inventory due to weak consumer demand and challenging macroeconomic conditions.
ADI plans to ship below end-market demand in the fourth quarter, aiming to normalize customer inventory and enable a quicker return to growth in the coming quarters. Despite a challenging quarter, ADI remains optimistic about the rebound of its consumer segment. The company’s fourth-quarter revenue projection of $2.70 billion falls short of analysts’ average estimate of $3.01 billion. ADI’s adjusted earnings for the same quarter are also expected to be below analysts’ expectations. Ultimately, the company is strategically working to shorten lead times, reduce backlog, and improve overall performance.