(Reuters) - Chipmaker Analog Devices (NASDAQ:ADI) forecast second-quarter profit and revenue below estimates on Wednesday, as it grapples with uncertain demand from the industrial and automotive sectors.
The earnings follow a weak forecast from Texas Instruments (NASDAQ:TXN) last month and underscore the challenges facing the chip industry as businesses across sectors clear excess inventory that piled up with the pandemic-driven demand boom fading.
"Consistent with our prior view, we expect customer inventory rationalization to largely subside in our second quarter, and thus enter the second half in a more favorable business backdrop" Analog Devices CEO Vincent Roche said.
The company expects $2.10 billion in second-quarter revenue, plus or minus 100 million, below analysts' average estimate of $2.36 billion, according to LSEG data.
Adjusted profit for the quarter is expected to be $1.26 per share, plus or minus 10 cents, also below estimates of $1.56.
The company's industrial unit, which accounts for nearly 50% of its revenue, reported a 31% decline in the first quarter due to the ongoing supply glut.
Growth in the automotive unit also slowed to a near-two year low of 9%. The auto industry has pulled back on chip orders in recent months as high interest rates affect demand for vehicles.
Research firm Canalys estimate growth in the global electric-vehicle market is set to slow to 27.1% this year as a reduction in state subsidies makes new cars less appealing to buyers.
Analog Devices' first-quarter revenue stood at $2.51 billion, above analysts' expectations of $2.50 billion.