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Linear falls on disappointing 4Q revenue outlook

NEW YORK (AP) -- Linear Technology's stock declined Wednesday as the circuit maker provided conservative fiscal fourth-quarter revenue guidance due to customers' cautious ordering.

THE SPARK: As in the third quarter, Linear anticipates fourth-quarter revenue will rise 1 percent to 4 percent over the third quarter. This implies $317.5 million to $327 million. Analysts polled by FactSet expect revenue of $330 million.

Linear also reported third-quarter earnings of 46 cents per share on revenue of $314.5 million. Analysts polled by FactSet expected earnings of 43 cents per share on revenue of $314.7 million.

CEO Lothar Maier said in a statement that customers "continue to order cautiously to the low-end of published lead times."

THE ANALYSIS: Stifel Nicolaus analyst Tore Svanberg reaffirmed a "Hold" rating. "While demand could be improving, customers are still leery from the fits and starts in the past year and the mixed media headlines and focused on not running ahead of the perceived demand recovery," Svanberg said in a client note.

Mark Lipacis of Jefferies said that there are some encouraging signs, as Linear had a positive book-to-bill ratio and said customers are seeing growth in the markets they serve. He maintained a "Hold" rating.

A representative for Linear did not immediately respond to an email seeking comment.

SHARE ACTION: Shares of Linear Technology dropped $1.49, or 4.1 percent, to $35.19 in midday trading. The stock has traded in a 52-week range of $28.28 to $38.90. For the year to date, shares are up 6.9 percent.