Analog Devices Inc. ( ADI Quick Quote ADI - Free Report) reported third-quarter fiscal 2022 adjusted earnings of $2.52 per share, beating the Zacks Consensus Estimate by 3.7%. The bottom line rose 47% year over year. Revenues of $3.11 billion surpassed the Zacks Consensus Estimate of $3.06 billion. Also, the top line improved 77% year over year. The strong performance delivered by Analog Devices across the industrial, automotive, consumer and communications markets drove the top line. Although the pandemic-led supply challenges remained headwinds to ADI, its high-performance analog, mixed-signal and power portfolio contributed well. Revenues by End Markets Industrial: Analog Devices generated revenues of $1.56 billion (accounting for 50% of the total revenues), which grew 55% year over year. Communications: Revenues from the market were $490.7 million (16% of revenues), increasing 69% year over year. Automotive: Revenues from the market summed $659.1 million (21% of revenues), up 127% from the year-ago quarter’s level. Consumer: The market generated revenues of $404.98 million (13% of revenues), reflecting 136% growth on a year-over-year basis. Operating Details
The adjusted gross margin expanded 250 basis points (bps) on a year-over-year basis to 74.1%.
Adjusted operating expenses were $746.6 million, up 51.5% from the year-ago quarter’s level. As a percentage of revenues, adjusted operating expenses were 24%, contracting 400 bps year over year. The adjusted operating margin expanded 650 bps on a year-over-year basis to 50.1% in the reported quarter. Balance Sheet & Cash Flow
As of Jul 30, 2022, cash and cash equivalents were $1.5 billion, down from $1.7 billion as of Apr 30, 2022.
Long-term debt was $6.252 billion at the end of the fiscal third quarter compared with $6.253 billion at the end of the fiscal second quarter. Net cash provided by operations was $1.25 million in the reported quarter, up from $1.22 billion in the prior quarter. ADI generated $1.08 billion of free cash flow in the fiscal third quarter. Additionally, Analog Devices returned $1.3 billion to its shareholders, of which dividend payments account for $394 million and repurchased shares amount to $906 million in the fiscal third quarter. Guidance
For fourth-quarter fiscal 2022, ADI expects revenues of $3.15 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $3.11 billion.
Non-GAAP earnings are expected to be $2.57 (+/- $0.10) per share. The consensus mark for the same is pegged at $2.50 per share. Analog Devices anticipates non-GAAP operating margins of 50.3% (+/- 70 bps). Zacks Rank & Stocks to Consider
Currently, Analog Devices carries a Zacks Rank #4 (Sell).
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