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Analog Devices (ADI) Beats Q4 Earnings & Revenue Estimates

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Analog Devices Inc. (ADI - Free Report) reported fourth-quarter fiscal 2020 adjusted earnings of $1.44 per share, which beat the Zacks Consensus Estimate of $1.32. Also, the bottom line increased 21% year over year.

Revenues of $1.53 billion also surpassed the Zacks Consensus Estimate of $1.44 billion. The top line increased 4.8% sequentially and 5.7% year over year. Also, B2B revenues increased 4% sequentially and 10% year over year.

The increase in revenues was led by growth in all its end markets.

Revenues by End Markets

Industrial: The company generated revenues of $811.2 million (accounting for 53% of total revenues), up 9% year over year.

Communications: Revenues from this market came in at $312.6 million (20% of revenues), increasing 19% year over year.

Automotive: Revenues from this market came in at $229.8 million (15% of revenues), up 2% from the year-ago quarter.

Consumer: This market generated revenues of $172.6 million (11% of revenues), reflecting a 17% decline on a year-over-year basis.

Analog Devices, Inc. Price, Consensus and EPS Surprise

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 expanded 160 basis points (bps) on a year-over-year basis to 70%.

Total adjusted operating expenses were $431.4 million, up 1.1% from the year-ago quarter.

Non-GAAP operating margin expanded 290 bps on a year-over-year basis to 41.7% for the reported quarter.

Balance Sheet & Cash Flow

At fiscal fourth quarter-end, cash and cash equivalents were $1.06 billion, down from $1.09 billion in the prior quarter.

Long-term debt was approximately $5.1 billion, flat sequentially.

Net cash provided by operations was $673 million for the fiscal fourth quarter, up from $557.2 million in the prior quarter.

The company generated $643 million of free cash flow during the fiscal fourth quarter.

Additionally, Analog Devices returned $237 million to shareholders through dividends and share repurchases in the reported quarter.

Guidance

For first-quarter fiscal 2021, Analog Devices expects revenues to be $1.50 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.43 billion.

Non-GAAP earnings are expected to be $1.30 (+/- $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 40% (+/- 100 bps).

Zacks Rank & Key Picks

Analog Devices currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the broader technology sector include Marchex (MCHX - Free Report) , Overstock.com (OSTK - Free Report) and Maxim Integrated Products, Inc.  , each carrying a Zacks Rank #2 (Buy).

Long-term earnings growth for Marchex, Overstock.com, and Maxim is currently projected at 15%, 20% and 10%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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