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Why Is Analog Devices (ADI) Up 5.2% Since Last Earnings Report?
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It has been about a month since the last earnings report for Analog Devices (ADI - Free Report) . Shares have added about 5.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
Analog Devices Q4 Earnings Match Estimates
Analog Devices delivered fourth-quarter fiscal 2023 adjusted earnings of $2.01 per share, which came in line with the Zacks Consensus Estimate. The bottom line declined by 26% from the year-ago fiscal quarter’s reported figure.
Revenues of $2.716 billion came ahead of the Zacks Consensus Estimate of $2.713 billion. The top line fell 16% from the year-ago fiscal quarter’s reported figure.
Softness in communications, consumer and industrial markets was a major negative.
Nevertheless, the company witnessed solid momentum across the automotive markets during the reported quarter.
Revenues by End Markets
Industrial: The market generated revenues of $1.35 billion (accounting for 50% of the total revenues), which fell 20% year over year. The figure missed the Zacks Consensus Estimate of $1.41 million.
Communications: Revenues from the market were $340.2 million (13% of revenues), decreasing 32% from the year-ago fiscal quarter’s reported figure. The figure surpassed the Zacks Consensus Estimate of $332 million.
Automotive: Revenues from the market summed up to $731.4 million (27% of revenues), up 14% from the year-ago fiscal quarter’s level. The figure surpassed the Zacks Consensus Estimate of $678 million.
Consumer: The market generated revenues of $291.4 million (11% of revenues), reflecting a 28% decline from the year-ago fiscal quarter’s reported figure. The figure came below the Zacks Consensus Estimate of $295 million.
Operating Details
The adjusted gross margin contracted 380 basis points (bps) from the year-ago fiscal quarter’s level to 70.2%.
Adjusted operating expenses were $692.1 million, down 6.9% from the year-ago fiscal quarter’s level. As a percentage of revenues, adjusted operating expenses were 25.5%, expanding 260 bps year over year.
The adjusted operating margin contracted 640 bps on a year-over-year basis to 44.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Oct 28, 2023, cash and cash equivalents were $958.1 billion, down from $1.15 billion as of Jul 29, 2023.
Long-term debt was $5.9 billion at the end of the fiscal fourth quarter compared with $6.44 billion at the end of the fiscal third quarter.
Net cash provided by operations was $1.19 billion in the reported quarter, up from $1.14 billion in the prior fiscal quarter.
ADI generated $711 million of free cash flow in the fiscal fourth quarter.
Analog Devices returned $898 million to its shareholders in the fiscal fourth quarter, of which dividend payments accounted for $428 million and repurchased shares amounted to $470 million.
Guidance
For first-quarter fiscal 2024, ADI expects revenues of $2.50 billion (+/- $100 million).
Non-GAAP earnings are expected to be $1.70 (+/- $0.10) per share.
Analog Devices anticipates non-GAAP operating margins of 41.5% (+/- 70 bps)
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -11.68% due to these changes.
VGM Scores
Currently, Analog Devices has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Analog Devices has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Analog Devices belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, M/A-Com (MTSI - Free Report) , has gained 8.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
M/A-Com reported revenues of $150.38 million in the last reported quarter, representing a year-over-year change of -15.6%. EPS of $0.56 for the same period compares with $0.77 a year ago.
M/A-Com is expected to post earnings of $0.57 per share for the current quarter, representing a year-over-year change of -29.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
M/A-Com has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Why Is Analog Devices (ADI) Up 5.2% Since Last Earnings Report?
It has been about a month since the last earnings report for Analog Devices (ADI - Free Report) . Shares have added about 5.2% 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 the most recent earnings report in order to get a better handle on the important drivers.
Analog Devices Q4 Earnings Match Estimates
Analog Devices delivered fourth-quarter fiscal 2023 adjusted earnings of $2.01 per share, which came in line with the Zacks Consensus Estimate. The bottom line declined by 26% from the year-ago fiscal quarter’s reported figure.
Revenues of $2.716 billion came ahead of the Zacks Consensus Estimate of $2.713 billion. The top line fell 16% from the year-ago fiscal quarter’s reported figure.
Softness in communications, consumer and industrial markets was a major negative.
Nevertheless, the company witnessed solid momentum across the automotive markets during the reported quarter.
Revenues by End Markets
Industrial: The market generated revenues of $1.35 billion (accounting for 50% of the total revenues), which fell 20% year over year. The figure missed the Zacks Consensus Estimate of $1.41 million.
Communications: Revenues from the market were $340.2 million (13% of revenues), decreasing 32% from the year-ago fiscal quarter’s reported figure. The figure surpassed the Zacks Consensus Estimate of $332 million.
Automotive: Revenues from the market summed up to $731.4 million (27% of revenues), up 14% from the year-ago fiscal quarter’s level. The figure surpassed the Zacks Consensus Estimate of $678 million.
Consumer: The market generated revenues of $291.4 million (11% of revenues), reflecting a 28% decline from the year-ago fiscal quarter’s reported figure. The figure came below the Zacks Consensus Estimate of $295 million.
Operating Details
The adjusted gross margin contracted 380 basis points (bps) from the year-ago fiscal quarter’s level to 70.2%.
Adjusted operating expenses were $692.1 million, down 6.9% from the year-ago fiscal quarter’s level. As a percentage of revenues, adjusted operating expenses were 25.5%, expanding 260 bps year over year.
The adjusted operating margin contracted 640 bps on a year-over-year basis to 44.7% in the reported quarter.
Balance Sheet & Cash Flow
As of Oct 28, 2023, cash and cash equivalents were $958.1 billion, down from $1.15 billion as of Jul 29, 2023.
Long-term debt was $5.9 billion at the end of the fiscal fourth quarter compared with $6.44 billion at the end of the fiscal third quarter.
Net cash provided by operations was $1.19 billion in the reported quarter, up from $1.14 billion in the prior fiscal quarter.
ADI generated $711 million of free cash flow in the fiscal fourth quarter.
Analog Devices returned $898 million to its shareholders in the fiscal fourth quarter, of which dividend payments accounted for $428 million and repurchased shares amounted to $470 million.
Guidance
For first-quarter fiscal 2024, ADI expects revenues of $2.50 billion (+/- $100 million).
Non-GAAP earnings are expected to be $1.70 (+/- $0.10) per share.
Analog Devices anticipates non-GAAP operating margins of 41.5% (+/- 70 bps)
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -11.68% due to these changes.
VGM Scores
Currently, Analog Devices has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Analog Devices has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Analog Devices belongs to the Zacks Semiconductor - Analog and Mixed industry. Another stock from the same industry, M/A-Com (MTSI - Free Report) , has gained 8.9% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
M/A-Com reported revenues of $150.38 million in the last reported quarter, representing a year-over-year change of -15.6%. EPS of $0.56 for the same period compares with $0.77 a year ago.
M/A-Com is expected to post earnings of $0.57 per share for the current quarter, representing a year-over-year change of -29.6%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.3%.
M/A-Com has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.