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Analog Devices (ADI) Q3 Earnings & Revenues Beat, Decline Y/Y
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Analog Devices Inc. (ADI - Free Report) has reported third-quarter fiscal 2024 adjusted earnings of $1.58 per share, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line declined 37% from the year-ago quarter.
Revenues of $2.31 billion beat the Zacks Consensus Estimate of $2.27 billion. However, the top line fell 25% from the year-ago quarter.
Softness in the industrial, communications and automotive end-markets led to the year-over-year decline in the top line.
Revenues by End Markets
Industrial: The market generated revenues of $1.06 billion (accounting for 46% of the total revenues), which fell 37% year over year. The figure missed the Zacks Consensus Estimate of $1.07 million.
Communications: Revenues from the market were $266.6 million (12% of revenues), decreasing 26% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $247 million.
Automotive: Revenues from the market summed up to $670.3 million (29% of revenues), down 8% from the year-ago quarter. The figure missed the Zacks Consensus Estimate of $682 million.
Consumer: The market generated revenues of $316.6 million (14% of revenues), reflecting 3% growth from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $269 million.
Analog Devices, Inc. Price, Consensus and EPS Surprise
The adjusted gross margin contracted 430 basis points (bps) from the year-ago quarter to 67.9%.
Adjusted operating expenses were $618.8 million, down 17.7% from the year-ago quarter. As a percentage of revenues, adjusted operating expenses were 26.8%, expanding 240 bps year over year.
The adjusted operating margin was 41.2% in the reported quarter, which contracted 660 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Aug 3, 2024, cash and cash equivalents, and short-term investments were $2.54 billion, up from $2.36 billion as of May 4, 2024.
The long-term debt was $6.66 billion at the end of third-quarter fiscal 2024 compared with $6.61 billion at the end of second-quarter fiscal 2024.
Net cash provided by operations was $855 million in the reported quarter, up from $808 million in the prior quarter.
ADI generated $701 million in free cash flow in the fiscal third quarter.
Analog Devices returned $574 million to its shareholders in the fiscal third quarter, of which dividend payments accounted for $456 million and repurchased shares amounted to $118 million.
Guidance
For fourth-quarter fiscal 2024, ADI expects revenues of $2.40 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.36 billion.
Non-GAAP earnings are expected to be $1.63 (+/- $0.10) per share. The consensus mark for the same is pinned at $1.60 per share.
The company anticipates a non-GAAP operating margin of 41% (+/- 100 bps).
Zacks Rank & Stocks to Consider
Currently, Analog Devices carries a Zacks Rank #4 (Sell).
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Analog Devices (ADI) Q3 Earnings & Revenues Beat, Decline Y/Y
Analog Devices Inc. (ADI - Free Report) has reported third-quarter fiscal 2024 adjusted earnings of $1.58 per share, which surpassed the Zacks Consensus Estimate by 5.3%. The bottom line declined 37% from the year-ago quarter.
Revenues of $2.31 billion beat the Zacks Consensus Estimate of $2.27 billion. However, the top line fell 25% from the year-ago quarter.
Softness in the industrial, communications and automotive end-markets led to the year-over-year decline in the top line.
Revenues by End Markets
Industrial: The market generated revenues of $1.06 billion (accounting for 46% of the total revenues), which fell 37% year over year. The figure missed the Zacks Consensus Estimate of $1.07 million.
Communications: Revenues from the market were $266.6 million (12% of revenues), decreasing 26% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $247 million.
Automotive: Revenues from the market summed up to $670.3 million (29% of revenues), down 8% from the year-ago quarter. The figure missed the Zacks Consensus Estimate of $682 million.
Consumer: The market generated revenues of $316.6 million (14% of revenues), reflecting 3% growth from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $269 million.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote
Operating Details
The adjusted gross margin contracted 430 basis points (bps) from the year-ago quarter to 67.9%.
Adjusted operating expenses were $618.8 million, down 17.7% from the year-ago quarter. As a percentage of revenues, adjusted operating expenses were 26.8%, expanding 240 bps year over year.
The adjusted operating margin was 41.2% in the reported quarter, which contracted 660 bps from the year-ago quarter.
Balance Sheet & Cash Flow
As of Aug 3, 2024, cash and cash equivalents, and short-term investments were $2.54 billion, up from $2.36 billion as of May 4, 2024.
The long-term debt was $6.66 billion at the end of third-quarter fiscal 2024 compared with $6.61 billion at the end of second-quarter fiscal 2024.
Net cash provided by operations was $855 million in the reported quarter, up from $808 million in the prior quarter.
ADI generated $701 million in free cash flow in the fiscal third quarter.
Analog Devices returned $574 million to its shareholders in the fiscal third quarter, of which dividend payments accounted for $456 million and repurchased shares amounted to $118 million.
Guidance
For fourth-quarter fiscal 2024, ADI expects revenues of $2.40 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.36 billion.
Non-GAAP earnings are expected to be $1.63 (+/- $0.10) per share. The consensus mark for the same is pinned at $1.60 per share.
The company anticipates a non-GAAP operating margin of 41% (+/- 100 bps).
Zacks Rank & Stocks to Consider
Currently, Analog Devices carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Arista Networks (ANET - Free Report) , Audioeye (AEYE - Free Report) and Badger Meter (BMI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 49.5% in the year-to-date period. The long-term earnings growth rate for ANET is pegged at 17.20%.
Audioeye’s shares have surged 331.6% in the year-to-date period. The long-term earnings growth rate for Audioeye is projected at 25%.
Badger Meter’s shares have gained 31.8% in the year-to-date period. The long-term earnings growth rate for Badger Meter is expected to be 17.91%.