Analog Devices Inc. (ADI - Free Report) reported third-quarter fiscal 2018 adjusted earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.46. Moreover, the bottom line increased 22% year over year and 6% sequentially. Also, the figure surpassed the guided range of $1.38-$1.52.
Revenues of $1.57 billion topped the consensus mark of $1.52 billion and came ahead of the guided range of $1.47-$1.55billion. Moreover, the top line improved 7.8% year over year and 3.9% sequentially.
The strong growth was driven by robust performance from industrial, automotive and communications end-markets.
The company has authorized to repurchase an additional $2 billion of its common stock.
The stock has outperformed the industry in the past 12 months. It has gained 21.3% compared with the industry’s growth of 4.5%.
Revenues by End Markets
Industrial revenues (50% of the total sales) soared 14% year over year and 1% sequentially to $793.3 million.
Communications revenues (21% of the total sales) grew 27% year over year and 12% sequentially to $323.9 million.
Automotive revenues (16% of the total sales) jumped 6% from the year-ago quarter and 3% from the last reported quarter to $246.9 million.
Consumer revenues (13% of the total sales) declined 17% year over year but increased 5% sequentially to $208.6 million.
Operating Details
Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis but decreased 10 bps sequentially to 71.2%.
Adjusted operating expenses, as a percentage of revenues, declined 150 bps from the year-ago quarter and 70 bps sequentially to 28.5%.
Non-GAAP operating margin expanded 220 bps on a year-over-year basis and 60 bps sequentially to 42.7%.
Balance Sheet & Cash Flow
Analog Devices exited the third quarter with cash and short-term investments of approximately $772.6 million, down from $806.5 million at the end of fiscal second quarter.
Long-term debt was approximately $6.5 billion, down from $6.93 billion at fiscal second quarter-end.
Net cash provided by operations was $620.7 million, down from $718.5 million reported in the fiscal second quarter.
Guidance
For the fourth quarter of fiscal 2018, Analog Devices expects revenues of $1.57 billion (+/- $40 million). The Zacks Consensus Estimate for the same stands at $1.55 billion.
Analog Devices projects interest and other expenses at approximately $57 million.
Earnings are expected to be $1.52 (+/- $0.06) per share. The consensus mark for the same is pegged at $1.52.
Zacks Rank &Stocks to Consider
Currently, Analog Devices has a Zacks Rank #3 (Hold).Some better-ranked stocks in the technology sector are Cirrus Logic, Inc. (CRUS - Free Report) , Infineon Technologies AG (IFNNY - Free Report) and Rambus Inc. (RMBS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Cirrus Logic, Infineon Technologies and Rambus is currently projected to be 11.1%, 7.5% and 10%, respectively.
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Analog Devices Inc. (ADI - Free Report) reported third-quarter fiscal 2018 adjusted earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.46. Moreover, the bottom line increased 22% year over year and 6% sequentially. Also, the figure surpassed the guided range of $1.38-$1.52.
Revenues of $1.57 billion topped the consensus mark of $1.52 billion and came ahead of the guided range of $1.47-$1.55billion. Moreover, the top line improved 7.8% year over year and 3.9% sequentially.
The strong growth was driven by robust performance from industrial, automotive and communications end-markets.
The company has authorized to repurchase an additional $2 billion of its common stock.
The stock has outperformed the industry in the past 12 months. It has gained 21.3% compared with the industry’s growth of 4.5%.
Revenues by End Markets
Industrial revenues (50% of the total sales) soared 14% year over year and 1% sequentially to $793.3 million.
Communications revenues (21% of the total sales) grew 27% year over year and 12% sequentially to $323.9 million.
Automotive revenues (16% of the total sales) jumped 6% from the year-ago quarter and 3% from the last reported quarter to $246.9 million.
Consumer revenues (13% of the total sales) declined 17% year over year but increased 5% sequentially to $208.6 million.
Operating Details
Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis but decreased 10 bps sequentially to 71.2%.
Adjusted operating expenses, as a percentage of revenues, declined 150 bps from the year-ago quarter and 70 bps sequentially to 28.5%.
Non-GAAP operating margin expanded 220 bps on a year-over-year basis and 60 bps sequentially to 42.7%.
Balance Sheet & Cash Flow
Analog Devices exited the third quarter with cash and short-term investments of approximately $772.6 million, down from $806.5 million at the end of fiscal second quarter.
Long-term debt was approximately $6.5 billion, down from $6.93 billion at fiscal second quarter-end.
Net cash provided by operations was $620.7 million, down from $718.5 million reported in the fiscal second quarter.
Guidance
For the fourth quarter of fiscal 2018, Analog Devices expects revenues of $1.57 billion (+/- $40 million). The Zacks Consensus Estimate for the same stands at $1.55 billion.
Analog Devices projects interest and other expenses at approximately $57 million.
Earnings are expected to be $1.52 (+/- $0.06) per share. The consensus mark for the same is pegged at $1.52.
Zacks Rank &Stocks to Consider
Currently, Analog Devices has a Zacks Rank #3 (Hold).Some better-ranked stocks in the technology sector are Cirrus Logic, Inc. (CRUS - Free Report) , Infineon Technologies AG (IFNNY - Free Report) and Rambus Inc. (RMBS - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Cirrus Logic, Infineon Technologies and Rambus is currently projected to be 11.1%, 7.5% and 10%, respectively.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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