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Analog Devices (ADI) Beats Q3 Earnings & Revenue Estimates
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Analog Devices Inc. (ADI - Free Report) reported third-quarter fiscal 2020 adjusted earnings of $1.36 per share, which beat the Zacks Consensus Estimate of $1.33. Also, the bottom line increased 8% year over year.
Revenues of $1.46 billion also surpassed the Zacks Consensus Estimate of $1.45 billion. The top line increased 11% sequentially but declined 2% year over year.
The sequential increase in revenues was led by growth in communication and industrial markets.
Revenues by End Markets
Industrial: The company generated revenues of $774.4 million (accounting for 53% of total revenues), up 3% year over year.
Communications: Revenues from this market came in at $363.6 million (25% of revenues), increasing 14% year over year.
Automotive: Revenues from this market came in at $162.5 million (11% of revenues), down 29% from the year-ago quarter.
Consumer: This market generated revenues of $155.7 million (11% of revenues), reflecting a 13% decline on a year-over-year basis.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Non-GAAP gross margin contracted 50 basis points (bps) on a year-over-year basis to 69.9%.
Total operating expenses were $402 million, down 8.1% from the year-ago quarter.
Non-GAAP operating margin expanded 150 bps on a year-over-year basis to 42.3% for the reported quarter.
Balance Sheet & Cash Flow
At fiscal third quarter-end, cash and cash equivalents were $1.09 billion, up from $784.9 million in the prior quarter.
Long-term debt was approximately $5.1 billion, flat sequentially.
Net cash provided by operations was $557.2 million in the fiscal third quarter, up from $429 million in the prior quarter.
The company generated $536 million of free cash flow during the fiscal third quarter.
Additionally, Analog Devices returned $247 million to shareholders through dividends and share repurchases in the reported quarter.
Guidance
For fourth-quarter fiscal 2020, Analog Devices expects revenues to be $1.44 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.43 billion.
Non-GAAP earnings are expected to be $1.32 (+/- $0.10) per share. The consensus mark for the same is pegged at $1.29 per share.
The company anticipates non-GAAP operating margins to be 42% (+/- 100 bps).
Zacks Rank & Other Key Picks
Analog Devices currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Lam Research Corporation (LRCX - Free Report) and Maxim Integrated Products, Inc. . While Lam Research sports a Zacks Rank #1 (Strong Buy), both Dropbox and Maxim carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate of Dropbox, Lam Research, and Maxim is pegged at 34.4%, 15.4% and 10%, respectively.
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Analog Devices (ADI) Beats Q3 Earnings & Revenue Estimates
Analog Devices Inc. (ADI - Free Report) reported third-quarter fiscal 2020 adjusted earnings of $1.36 per share, which beat the Zacks Consensus Estimate of $1.33. Also, the bottom line increased 8% year over year.
Revenues of $1.46 billion also surpassed the Zacks Consensus Estimate of $1.45 billion. The top line increased 11% sequentially but declined 2% year over year.
The sequential increase in revenues was led by growth in communication and industrial markets.
Revenues by End Markets
Industrial: The company generated revenues of $774.4 million (accounting for 53% of total revenues), up 3% year over year.
Communications: Revenues from this market came in at $363.6 million (25% of revenues), increasing 14% year over year.
Automotive: Revenues from this market came in at $162.5 million (11% of revenues), down 29% from the year-ago quarter.
Consumer: This market generated revenues of $155.7 million (11% of revenues), reflecting a 13% decline on a year-over-year basis.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote
Operating Details
Non-GAAP gross margin contracted 50 basis points (bps) on a year-over-year basis to 69.9%.
Total operating expenses were $402 million, down 8.1% from the year-ago quarter.
Non-GAAP operating margin expanded 150 bps on a year-over-year basis to 42.3% for the reported quarter.
Balance Sheet & Cash Flow
At fiscal third quarter-end, cash and cash equivalents were $1.09 billion, up from $784.9 million in the prior quarter.
Long-term debt was approximately $5.1 billion, flat sequentially.
Net cash provided by operations was $557.2 million in the fiscal third quarter, up from $429 million in the prior quarter.
The company generated $536 million of free cash flow during the fiscal third quarter.
Additionally, Analog Devices returned $247 million to shareholders through dividends and share repurchases in the reported quarter.
Guidance
For fourth-quarter fiscal 2020, Analog Devices expects revenues to be $1.44 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.43 billion.
Non-GAAP earnings are expected to be $1.32 (+/- $0.10) per share. The consensus mark for the same is pegged at $1.29 per share.
The company anticipates non-GAAP operating margins to be 42% (+/- 100 bps).
Zacks Rank & Other Key Picks
Analog Devices currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Dropbox (DBX - Free Report) , Lam Research Corporation (LRCX - Free Report) and Maxim Integrated Products, Inc. . While Lam Research sports a Zacks Rank #1 (Strong Buy), both Dropbox and Maxim carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate of Dropbox, Lam Research, and Maxim is pegged at 34.4%, 15.4% and 10%, respectively.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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