Linear Technology Earnings Call Nuggets: Lead Times, Automotive Growth
Tore Svanberg – Stifel Nicolaus: First, Paul you mentioned that you’re running sort of at the lower end of range when it comes to lead times. Could you just remind us, what those numbers are and when is the last time, you can remember lead times being short?
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Paul Coghlan – VP of Finance and CFO: Well, our published lead times are four to six weeks and we can typically ship product in a shorter time frame than that. Right now, our published lead times have been steady for several years. If you go back to the very beginning of the recession in 2008, we probably had a period where our lead times were very, very short and then as the recession turned into a dramatic uptick, they picked up a bit, but have been pretty steady in last three years at four to six weeks.
Tore Svanberg – Stifel Nicolaus: Very good and if we take the midpoint of your guidance range, which would imply $310 million in revenues for the December quarter, is that sort of like a true consumption number of your products or do you think there is basically some deviation based on the supply chain being so conservative?
Paul Coghlan – VP of Finance and CFO: Well, you noticed we expanded our guidance. Usually we’re a little tighter than a 5% to 10% or within a 5 percentage point range. So, (ferrying) out what the true immediate consumption is has been a bit of a challenge for us. We mentioned in our call that I mentioned earlier that if we look at our field level forecast they are saying that business has changed a little bit, but not very much. When we look at the booking patterns end of September and in the first couple weeks of October would imply that at least in the short-term, customers are restraining their demand. So, our feeling is that within the range is the true demand of what we’re going to ship next quarter that we are not going to build inventory next quarter, but we really don’t have as clearer vision into the quarter as we typically have at this time.
Tore Svanberg – Stifel Nicolaus: Last question, what should we assume for shutdowns in the December quarter, will it be the similar as the once you took in the September quarter?
Paul Coghlan – VP of Finance and CFO: I think they will be similar in some areas and enhanced in other areas. We’re planning to do additional shutdowns in our wafer fabs, clearly as the sales decline, we’ll have to tailor back production there, and as far as the rest of the Company, we’re probably doing, shutdowns around the holidays as well.
Joseph Moore – Morgan Stanley: If I look at your business over the last eight or nine quarters, I mean you are down about 20% over that period from sort of the peak of late 2010, and if I take automotive out of that or my extrapolation of automotive, you’re down about 25%. I guess, I mean it sounds like a lot, I know the macro issues are weak, but is there anything, I mean, you just step back and look at that how much of that is sort of that there was some inflation in those original numbers, is there some element of the current numbers that’s depressed that you would expect to rebound, just how can you put that in some kind of context for me?
Paul Coghlan – VP of Finance and CFO: Well, I think just as you pointed that automotive has grown in that period. If you go to the very early part of that period, we had some computer opportunities, tablet opportunities that did not repeat. So, if you back that out and you back out the automotive I think the peak we showed of (388), I think, was probably somewhat inflated by one particular business opportunity, so that I don’t think the drop off if you want to take the plusses and minuses that are significant, has been significant as you alluded to at the beginning of your question. But other than that business for the last three years has been kind of roller-coaster business, we had a recession, we had a dramatic snapback from recession, we had global issues with supply chain in catastrophic events Japan and Thailand that caused sales to go up as people built inventory then as those issues became alleviated inventory went back down. So we’ve had macroeconomic issues that have overridden that in Europe in particular, U.S. to some extent and now they are starting to show in Asia and China, so we had a lot of macro stuff that’s happened. Joe, you’ve had a lot of positive for us on the automotive side and in the industrial side for part of that, some negative in the computers side, so you add it all up you get to where we are today.
Joseph Moore – Morgan Stanley: If I could follow-up on that, I think the automotive piece, I mean it looks like you’ve grown just extrapolate from your bookings commentary you’ve grown well over 20% a year in the last couple of years and that’s, I understand they are growing content, but you’ve grown a lot faster than other semiconductor vendors and you’ve continued to highlight opportunities, particularly in hybrids. I’m just wondering if you can talk about, is that hybrid opportunity creating some of that outperformance or are there any big kind of blocks that you can point to that would drive that growth to be so good?
Lothar Maier – CEO: Certainly the hybrid portion is a highly visible market and we were early providers of these EMS products for hybrid and electric vehicles. So we certainly have grown there and I think probably are the leader in terms of providing products there. But it’s still allover vehicles; it’s not just the hybrid and electric vehicles, conventional cars are being packed with more electronics. We still have a good presence in the infotainment portion of the conventional automobiles. So I think the hybrid and electric vehicles are probably the additive portion to our sales in the automotive market. But in general we see growth in pretty much all vehicles. Joe, I think we have talked for several years not just the past couple that we thought automotive was a really good fit for our Company. Automotive companies in particular value quality, reliability, on-time delivery. They weigh those, particularly in Japan and Europe very, very highly. So that you had this transition into more electronics in cars, the suppliers of cars and they are Tier 1 suppliers are very concerned about who can do a good job in that area and that requires not just innovative parts that’s (low to) address but also executing through the factory. So I think over the last five years we have put emphasis on this. We have had some strong suites that we think it plays to and we think it’s starting to show in the numbers now.
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