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Analog Devices (ADI) Q2 Earnings Beat, Revenues Rise Y/Y

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Analog Devices Inc. (ADI - Free Report) has reported second-quarter fiscal 2021 adjusted earnings of $1.54 per share, beating the Zacks Consensus Estimate by 6.2%. Further, the bottom line increased 43% year over year and 6.9% sequentially.

Revenues of $1.7 billion surpassed the Zacks Consensus Estimate of $1.6 billion. Also, the top line improved 26% year over year and 6.6% from the first-quarter fiscal 2021 level.

Strong performance delivered by the company across all end-markets, especially the industrial and automotive markets, drove the top line.

Revenues by End Markets

Industrial: The company generated revenues of $927.2 million (accounting for 59% of total revenues), which grew 36% year over year.

Communications: Revenues from the market were $276.9 million (17% of revenues), increasing 0.1% year over year.

Automotive: Revenues from the market summed $257.6 million (16% of revenues), up 42% from the year-ago quarter.

Consumer: The market generated revenues of $154.7 million (9% of revenues), reflecting 8% growth 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

Adjusted gross margin expanded 320basis points (bps) on a year-over-year basis to 70.9%.

Adjusted operating expenses were $483.7 million, up 23.9% from the year-ago quarter. As a percentage of revenues, adjusted operating expenses were 29.1%, contracting 50 bps year over year.

Adjusted operating margin expanded 370 bps on a year-over-year basis to 41.7% inthe reported quarter.

Balance Sheet & Cash Flow

As of May 1, 2021, cash and cash equivalents were $1.3 billion, up from $1.05 billionas of Jan 30, 2021.

Long-term debt was $3.8 billion at the end of the fiscal second quarter, down from $4.7 billion at the end of the fiscal first quarter.

Net cash provided by operations was $736.4 million in the reported quarter, up from $427.9 million in the prior quarter.

The company generated $677.2 million of free cash flow inthe fiscal second quarter.

Additionally, Analog Devices returned $443 million to its shareholders of which it made dividend payments worth $254 million and repurchased shares worth $189 million in the fiscal second quarter.


For third-quarter fiscal 2021, the company expects revenues of $1.7 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.65 billion.

Non-GAAP earnings are expected to be $1.61 (+/- $0.11) per share. The consensus mark for the same is pegged at $1.53 per share.

The company anticipates non-GAAP operating margins of 42.5% (+/- 100 bps).

Zacks Rank & Stocks to Consider

Currently, Analog Devices carry a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are NVIDIA Corporation (NVDA - Free Report) , NXP Semiconductors N.V. (NXPI - Free Report) and Texas Instruments Incorporated (TXN - Free Report) . All companies carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates of NVIDIA, NXP Semiconductors and Texas Instruments are pegged at 15.23%, 10% and 9.33%, respectively.

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