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Analog Devices (ADI) to Report Q3 Earnings: What's in Store?

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Analog Devices, Inc. (ADI - Free Report) is scheduled to report third-quarter fiscal 2021 results on Aug 18.

For the fiscal third quarter, the company expects revenues of $1.7 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.71 billion, indicating an improvement of 17.6% from the year-ago reported figure.

Further, it anticipates adjusted earnings per share to be $1.61 (+/-$0.11). The consensus mark for the same is pegged at $1.61 per share, indicating a 18.4% rise from the previous-year reported figure.

The company surpassed earnings estimates in all the trailing four quarters, with the average being 6.66%.

Factors to Note

Analog Devices is likely to have gained from a strong demand environment across automation, instrumentation and energy businesses during the fiscal third quarter.

A diversified business across customers, products and applications is expected to have contributed well to its third-quarter performance.

Strong demand for the company’s battery management system (BMS) technology is likely to have continued aiding its performance in the automotive end market during the quarter.

Growing investments in battery manufacturing capacity to meet the increasing demand of EVs might have remained a positive.

During the quarter, the company introduced ASIL-D functional safety and innovative new low-power features in the BMS portfolio to ensure continuous monitoring of batteries. This is expected to have aided quarterly performance.

Further, radio platform for the 5G O-RAN ecosystem is likely to have benefited the communications business during the quarter.

Solid design momentum across the diversified industrial market is expected to have contributed well to top-line growth during the to-be-reported quarter.

The company introduced long-reach Industrial Ethernet Offerings during the fiscal third quarter for long-distance connectivity in process, factory and building automation. This might have supported the quarterly performance.

Analog Devices’ broad instrumentation business including automated test equipment, electronic test, and measurement and scientific instruments is anticipated to have aided its quarterly performance.

During the quarter, the company teamed up with Keysight Technologies (KEYS - Free Report) for faster network interoperability and compliance testing for Open RAN radio units. This might have supported its performance in the quarter under discussion.

Further, it is likely to have benefited from the closing of Maxim Integrated acquisition in the to-be-reported quarter.

Yet, mounting expenses and a constrained supply environment owing to the ongoing coronavirus pandemic are likely to have remained major headwinds in the quarter under review.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Analog Devices this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Analog Devices has an Earnings ESP of 0.00% and a Zacks Rank #3, at present.

Stock to Consider

Below is a stock that you may consider as our model shows that it has the right combination of elements to beat on earnings this season.

HP Inc. (HPQ - Free Report) has an Earnings ESP of +1.00% and a Zacks Rank #3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.


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