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Analog Devices Q4 Earnings Beat: Will Dim Outlook Pull the Stock Down?
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Analog Devices (ADI - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate by 1.83%. The bottom line came at the midpoint of management’s guidance but declined 16.9% year over year
Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.9%.
Analog Devices’ fourth-quarter fiscal 2024 revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.5% and came in line with management’s guidance
While the consumer end market delivered a strong performance, the persistent weakness in the industrial, communications and automotive sectors has resulted in a 10% year-over-year decline in the top line.
Despite reporting better-than-expected financial results, Analog Devices provided pessimistic guidance for the first quarter of fiscal 2025. Its top and bottom-line forecasts for the first quarter fell short of the respective Zacks Consensus Estimate.
The dull outlook is likely to further pull down ADI’s share price. Shares of ADI have lost 6.2% in the past six months against the Zacks Computer and Technology sector’s return of 8.1%.
Analog Devices’ Q4 Details
Stronger-than-expected performance in the consumer market was suppressed by softness in three other segments — industrial, communications and automotive.
Industrial: This end market generated revenues of $1.07 billion (accounting for 44% of the total revenues), which fell 21% year over year. The figure missed the Zacks Consensus Estimate of $1.13 million.
Communications: Revenues from the market were $275.6 million (11% of revenues), which decreased 18% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $270 million.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Automotive: Revenues from the market summed up to $717 million (29% of revenues), down 2% from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $662 million.
Consumer: The market generated revenues of $379.7 million (16% of revenues), reflecting 31% growth from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $340 million.
The adjusted gross margin contracted 230 basis points (bps) from the year-ago quarter to 67.9%. The adjusted operating margin was 41.1% in the reported quarter, which contracted 360 bps from the year-ago quarter.
ADI’s FY24 Performance in Brief
Analog Devices’ fiscal 2024 total revenues declined 23% year over year to $9.43 billion. However, the top line surpassed the Zacks Consensus Estimate of $9.39 billion. The industrial market generated $4.3 billion. The automotive market reported revenues of $2.83 billion, followed by communications and consumers with $1.1 billion and $1.2 billion, respectively.
Analog Devices posted non-GAAP earnings of $6.38 per share for fiscal 2024, down 37% from earnings of $10.09 in fiscal 2023. However, earnings surpassed the consensus mark of $6.34 per share.
Analog Devices’ Balance Sheet & Cash Flow
As of Nov. 2, 2024, cash and cash equivalents, and short-term investments were $2.4 billion, down from $2.54 billion as of Aug. 3, 2024.
The long-term debt was $6.63 billion at the end of fourth-quarter fiscal 2024, slightly lower than $6.66 billion at the end of third quarter.
Analog Devices generated operating cash flow and free cash flow of $1.05 billion and $855 million, respectively in the fourth quarter. The operating cash flow was $3.9 billion and the free cash flow was $3.1 billion for the fiscal 2024.
During the fourth quarter, it repurchased shares worth $95 million and paid $457 million in dividends. In fiscal 2024, ADI returned more than $2.4 billion to shareholders, including $616 million in share repurchases and $1.8 billion in dividends.
ADI’s Offers Dull Q1 Guidance
For first-quarter fiscal 2025, management expects net sales of $2.35 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.36 billion, indicating a year-over-year decline of 6.1%.
The company anticipates a non-GAAP operating margin of 40% (+/- 100 bps).
Non-GAAP earnings are expected to be $1.53 (+/-10 cents) per share. The consensus mark for the same is pinned at $1.58 per share, unchanged over the past 60 days, indicating a year-over-year decline of 8.7%.
Zacks Rank & Stocks to Consider
Currently, ADI carries a Zacks Rank #4 (Sell).
Agilysys (AGYS - Free Report) , AudioEye (AEYE - Free Report) and Amphenol (APH - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
AGYS shares have surged 62.4% year to date. The Zacks Consensus Estimate for BB’s full-year fiscal 2025 earnings is pegged at $1.31 per share, up by 9.2% over the past 60 days, indicating a gain of 19.1% from the year-ago quarter’s reported figure.
AEYE shares have reached a whopping 385.1% year to date. The Zacks Consensus Estimate for AEYE’s full-year 2024 earnings is pegged at 52 cents per share, up by a couple of pennies over the past 60 days, indicating a gain of 372.7% from the year-ago quarter’s reported figure.
APH shares have gained 47.8% year to date. The Zacks Consensus Estimate for APH’s full-year 2024 earnings is pegged at $1.84 per share, up by a couple of pennies over the past 60 days, indicating a gain of 21.9% from the year-ago quarter’s reported figure.
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Analog Devices Q4 Earnings Beat: Will Dim Outlook Pull the Stock Down?
Analog Devices (ADI - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate by 1.83%. The bottom line came at the midpoint of management’s guidance but declined 16.9% year over year
Analog Devices’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.9%.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Analog Devices’ fourth-quarter fiscal 2024 revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.5% and came in line with management’s guidance
While the consumer end market delivered a strong performance, the persistent weakness in the industrial, communications and automotive sectors has resulted in a 10% year-over-year decline in the top line.
Despite reporting better-than-expected financial results, Analog Devices provided pessimistic guidance for the first quarter of fiscal 2025. Its top and bottom-line forecasts for the first quarter fell short of the respective Zacks Consensus Estimate.
The dull outlook is likely to further pull down ADI’s share price. Shares of ADI have lost 6.2% in the past six months against the Zacks Computer and Technology sector’s return of 8.1%.
Analog Devices’ Q4 Details
Stronger-than-expected performance in the consumer market was suppressed by softness in three other segments — industrial, communications and automotive.
Industrial: This end market generated revenues of $1.07 billion (accounting for 44% of the total revenues), which fell 21% year over year. The figure missed the Zacks Consensus Estimate of $1.13 million.
Communications: Revenues from the market were $275.6 million (11% of revenues), which decreased 18% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $270 million.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote
Automotive: Revenues from the market summed up to $717 million (29% of revenues), down 2% from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $662 million.
Consumer: The market generated revenues of $379.7 million (16% of revenues), reflecting 31% growth from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $340 million.
The adjusted gross margin contracted 230 basis points (bps) from the year-ago quarter to 67.9%. The adjusted operating margin was 41.1% in the reported quarter, which contracted 360 bps from the year-ago quarter.
ADI’s FY24 Performance in Brief
Analog Devices’ fiscal 2024 total revenues declined 23% year over year to $9.43 billion. However, the top line surpassed the Zacks Consensus Estimate of $9.39 billion. The industrial market generated $4.3 billion. The automotive market reported revenues of $2.83 billion, followed by communications and consumers with $1.1 billion and $1.2 billion, respectively.
Analog Devices posted non-GAAP earnings of $6.38 per share for fiscal 2024, down 37% from earnings of $10.09 in fiscal 2023. However, earnings surpassed the consensus mark of $6.34 per share.
Analog Devices’ Balance Sheet & Cash Flow
As of Nov. 2, 2024, cash and cash equivalents, and short-term investments were $2.4 billion, down from $2.54 billion as of Aug. 3, 2024.
The long-term debt was $6.63 billion at the end of fourth-quarter fiscal 2024, slightly lower than $6.66 billion at the end of third quarter.
Analog Devices generated operating cash flow and free cash flow of $1.05 billion and $855 million, respectively in the fourth quarter. The operating cash flow was $3.9 billion and the free cash flow was $3.1 billion for the fiscal 2024.
During the fourth quarter, it repurchased shares worth $95 million and paid $457 million in dividends. In fiscal 2024, ADI returned more than $2.4 billion to shareholders, including $616 million in share repurchases and $1.8 billion in dividends.
ADI’s Offers Dull Q1 Guidance
For first-quarter fiscal 2025, management expects net sales of $2.35 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.36 billion, indicating a year-over-year decline of 6.1%.
The company anticipates a non-GAAP operating margin of 40% (+/- 100 bps).
Non-GAAP earnings are expected to be $1.53 (+/-10 cents) per share. The consensus mark for the same is pinned at $1.58 per share, unchanged over the past 60 days, indicating a year-over-year decline of 8.7%.
Zacks Rank & Stocks to Consider
Currently, ADI carries a Zacks Rank #4 (Sell).
Agilysys (AGYS - Free Report) , AudioEye (AEYE - Free Report) and Amphenol (APH - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
AGYS, AEYE and APH sport a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AGYS shares have surged 62.4% year to date. The Zacks Consensus Estimate for BB’s full-year fiscal 2025 earnings is pegged at $1.31 per share, up by 9.2% over the past 60 days, indicating a gain of 19.1% from the year-ago quarter’s reported figure.
AEYE shares have reached a whopping 385.1% year to date. The Zacks Consensus Estimate for AEYE’s full-year 2024 earnings is pegged at 52 cents per share, up by a couple of pennies over the past 60 days, indicating a gain of 372.7% from the year-ago quarter’s reported figure.
APH shares have gained 47.8% year to date. The Zacks Consensus Estimate for APH’s full-year 2024 earnings is pegged at $1.84 per share, up by a couple of pennies over the past 60 days, indicating a gain of 21.9% from the year-ago quarter’s reported figure.