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Analog Devices (ADI) Q1 Earnings Beat, Guidance Impressive
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Analog Devices Inc. (ADI - Free Report) reported first-quarter fiscal 2018 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate by 13 cents. Although the bottom line surged 51.1% year over year, it declined 2.1% sequentially. However, the figure surpassed the guided range of $1.20-$1.36.
Revenues of $1.52 billion topped the consensus mark of $1.50 billion and came close to the higher end of the guided range of $1.44-$1.54 billion. Moreover, the top line surged 54.3% year over year but declined 1.5% sequentially.
The strong year-over-year growth was driven by a robust performance from industrial, automotive and communications end-markets.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Industrial (49% of total revenues) revenues soared 87.4% year over year and 4% sequentially to $743.6 million.
Communications (18.7% of total revenues) revenues surged 63% year over year and 4.1% sequentially to $284.3 million.
Automotive (16.6% of total revenues) revenues jumped 76.4% from the year-ago quarter and 5.1% from the previous quarter to $252.2 million.
Consumer (15.7% of total revenues) revenues declined 11.8% year over year and 23.8% sequentially to $238.5 million.
Operating Details
Non-GAAP gross margin expanded 500 bps on a year-over-year basis and 20 bps sequentially to 71%.
Adjusted operating expenses as percentage of revenues declined 180 bps from the year-ago quarter but increased 110 bps sequentially to 29.4%.
Non-GAAP operating margin expanded 670 bps on a year-over-year basis but contracted 90 bps sequentially to 41.7%.
Balance Sheet & Cash Flow
Analog Devices exited the first quarter with cash and short-term investments of approximately $827.6 million, down from $1.05 billion at the end of the prior quarter.
Long-term debt was approximately $7.38 billion, down from $7.55 billion at the end of the previous quarter.
Net cash provided by operations was $388.7 million, significantly down from $707.4 million reported in the preceding quarter.
Guidance
For the second quarter of fiscal 2018, Analog Devices expects revenues between $1.43 billion and $1.51 billion. The Zacks Consensus Estimate stands at $1.45 billion.
On a non-GAAP basis, the company estimates gross margin in the range of 71-71.5%. Operating expenses are anticipated between $430 million and $440 million.
Analog Devices projects interest and other expense of approximately $60 million.
Earnings are expected in the band of $1.30-$1.44 per share. The consensus mark for the same is pegged at $1.24.
Long-term earnings growth rate for NVIDIA, Intel and On Semiconductor is projected at 10.25%, 8.42% and 12.23%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Analog Devices (ADI) Q1 Earnings Beat, Guidance Impressive
Analog Devices Inc. (ADI - Free Report) reported first-quarter fiscal 2018 adjusted earnings of $1.42 per share, beating the Zacks Consensus Estimate by 13 cents. Although the bottom line surged 51.1% year over year, it declined 2.1% sequentially. However, the figure surpassed the guided range of $1.20-$1.36.
Revenues of $1.52 billion topped the consensus mark of $1.50 billion and came close to the higher end of the guided range of $1.44-$1.54 billion. Moreover, the top line surged 54.3% year over year but declined 1.5% sequentially.
The strong year-over-year growth was driven by a robust performance from industrial, automotive and communications end-markets.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. Price, Consensus and EPS Surprise | Analog Devices, Inc. Quote
Revenues by End Markets
Industrial (49% of total revenues) revenues soared 87.4% year over year and 4% sequentially to $743.6 million.
Communications (18.7% of total revenues) revenues surged 63% year over year and 4.1% sequentially to $284.3 million.
Automotive (16.6% of total revenues) revenues jumped 76.4% from the year-ago quarter and 5.1% from the previous quarter to $252.2 million.
Consumer (15.7% of total revenues) revenues declined 11.8% year over year and 23.8% sequentially to $238.5 million.
Operating Details
Non-GAAP gross margin expanded 500 bps on a year-over-year basis and 20 bps sequentially to 71%.
Adjusted operating expenses as percentage of revenues declined 180 bps from the year-ago quarter but increased 110 bps sequentially to 29.4%.
Non-GAAP operating margin expanded 670 bps on a year-over-year basis but contracted 90 bps sequentially to 41.7%.
Balance Sheet & Cash Flow
Analog Devices exited the first quarter with cash and short-term investments of approximately $827.6 million, down from $1.05 billion at the end of the prior quarter.
Long-term debt was approximately $7.38 billion, down from $7.55 billion at the end of the previous quarter.
Net cash provided by operations was $388.7 million, significantly down from $707.4 million reported in the preceding quarter.
Guidance
For the second quarter of fiscal 2018, Analog Devices expects revenues between $1.43 billion and $1.51 billion. The Zacks Consensus Estimate stands at $1.45 billion.
On a non-GAAP basis, the company estimates gross margin in the range of 71-71.5%. Operating expenses are anticipated between $430 million and $440 million.
Analog Devices projects interest and other expense of approximately $60 million.
Earnings are expected in the band of $1.30-$1.44 per share. The consensus mark for the same is pegged at $1.24.
Zacks Rank & Stocks to Consider
Analog Devices holds a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include NVIDIA (NVDA - Free Report) , Intel (INTC - Free Report) and ON Semiconductor (ON - Free Report) . While NVIDIA sports a Zacks Rank #1 (Strong Buy), both Intel and ON Semiconductor has Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for NVIDIA, Intel and On Semiconductor is projected at 10.25%, 8.42% and 12.23%, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>