It has been about a month since the last earnings report for Analog Devices (ADI Quick QuoteADI - Free Report) . Shares have added about 4.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Analog Devices due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Analog Devices Beats Q2 Earnings & Revenue Estimates

Analog Devices 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.

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.

Guidance

For third-quarter fiscal 2021, the company expects revenues of $1.7 billion (+/- $70 million).

Non-GAAP earnings are expected to be $1.61 (+/- $0.11) per share.

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

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 5.55% due to these changes.

VGM Scores

Currently, Analog Devices has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Analog Devices has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.