We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Analog Devices (ADI) Tops Q1 Earnings and Revenue Estimates
Read MoreHide Full Article
Analog Devices Inc. (ADI - Free Report) reported first-quarter fiscal 2017 adjusted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 73 cents. Adjusted earnings per share exclude one-time items but include stock-based compensation expenses.
Shares of Analog Devices have outperformed the Zacks Semiconductor-Analog and Mixed industry in the last three months. The stock returned 14.7%, while the industry gained 9.6%.
The better-than-expected results were driven by strength across all the markets - industrial, automotive, consumer and communications, and the company’s increased focus on innovation and operational execution.
At the call, management sounded upbeat on the company’s progress related to the closure of the acquisition of Linear Technology. The company expects the deal to be completed by the end of its second fiscal quarter.
It is expected to make Analog Devices an industry leader across a huge range of products, customer breadth and scale. The deal will also help it to grow significantly in industrial, automotive, and communications infrastructure markets.
While its investments are aimed at strengthening the product line and countering increasing competition, the policy of returning cash through dividends and share buybacks will ensure investor loyalty.
Let’s delve deeper into the numbers.
Revenues
Analog Devices generated revenues of $984.4 million, down 1.9% sequentially but up 27.9% year over year. The year-over-year increase was attributable to improved performance across all the markets.
Moreover, revenues exceeded the company’s guidance range of $840 million to $900 million. It also surpassed the Zacks Consensus Estimate of $871.9 million.
Revenues by End Markets
The Industrial market generated 41% of Analog Devices’ total revenue (up 1.3% sequentially and 15.3% year over year). This represents a diversified market for the company, including industrial automation, instrumentation, energy, defense and health care segments.
Communications generated 18% of total revenue, up 1.3% sequentially and 3.5% year over year.
The Automotive segment generated around 14% of Analog Devices’ first quarter revenues, down 2.1% sequentially but up 9.5% year over year.
The Consumer segment, which Analog Devices clubs with its computing and handset businesses, decreased 8% sequentially but was up a massive 113.9% year over year. It accounted for 27% of total revenue.
Margins
Pro-forma gross margin was 66.1%, down 54 basis points (bps) sequentially but up 388 bps year over year. The year-over-year improvement was primarily backed by lower inventory reserves and higher utilization rates.
Analog Devices reported adjusted operating expenses of $306.5 million, up 7% sequentially and 15.8% year over year. Pro-forma operating margin of 35% was down 313 bps sequentially but up 715 bps year over year.
Net Profit
On a GAAP basis, Analog Devices recorded a net profit of $217.1 million or 69 cents per share compared with $164.5 million or 52 cents in the year-ago quarter.
The company generated adjusted net profit of $295 million compared with $180.1 million in the first quarter of fiscal 2016. Pro-forma earnings per share came in at 94 cents compared with 57 cents in the year-ago quarter.
Balance Sheet
Analog Devices exited the first quarter with cash and short-term investments of approximately $6.3 billion, up from $2.2 billion in the prior quarter. Accounts receivables were $472.5 million, down from $477.6 million in the previous quarter.
Long-term debt was approximately $3.8 billion, resulting in a net cash position of $2.5 billion.
Net cash flow from operations was around $314.4 million. Analog Devices spent $3.1 million on share repurchases and $129.7 million on cash dividends during the first quarter.
Analog Devices, Inc. Price, Consensus and EPS Surprise
For the second quarter of fiscal 2017, management expects revenues in a range of $870 million to $950 million. The Zacks Consensus Estimate is pegged at $877.2 million. On a non-GAAP basis, the company estimates gross margin of approximately 66.5% to 67.0%. Operating expenses are expected to be down 3% to up 1%. The company expects interest and other expense of approximately $30 million, tax rate of approximately 8% and earnings per share in a range of 74–86 cents. The Zacks Consensus Estimate is pegged at 77 cents.
Zacks Rank & Other Picks
Currently, Analog Devices has a Zacks Rank #2 (Buy). Other stocks worth considering in the broader technology sector include Xcerra Corporation , STMicroelectronics N.V. (STM - Free Report) and Texas Instruments Incorporated (TXN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, the estimates for Xcerra stayed unchanged while the same for STMicroelectronics and Texas Instruments went up 15.3% and 6.7%, respectively in the past 30 days.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Analog Devices (ADI) Tops Q1 Earnings and Revenue Estimates
Analog Devices Inc. (ADI - Free Report) reported first-quarter fiscal 2017 adjusted earnings of 94 cents per share, which beat the Zacks Consensus Estimate of 73 cents. Adjusted earnings per share exclude one-time items but include stock-based compensation expenses.
Shares of Analog Devices have outperformed the Zacks Semiconductor-Analog and Mixed industry in the last three months. The stock returned 14.7%, while the industry gained 9.6%.
The better-than-expected results were driven by strength across all the markets - industrial, automotive, consumer and communications, and the company’s increased focus on innovation and operational execution.
At the call, management sounded upbeat on the company’s progress related to the closure of the acquisition of Linear Technology. The company expects the deal to be completed by the end of its second fiscal quarter.
It is expected to make Analog Devices an industry leader across a huge range of products, customer breadth and scale. The deal will also help it to grow significantly in industrial, automotive, and communications infrastructure markets.
While its investments are aimed at strengthening the product line and countering increasing competition, the policy of returning cash through dividends and share buybacks will ensure investor loyalty.
Let’s delve deeper into the numbers.
Revenues
Analog Devices generated revenues of $984.4 million, down 1.9% sequentially but up 27.9% year over year. The year-over-year increase was attributable to improved performance across all the markets.
Moreover, revenues exceeded the company’s guidance range of $840 million to $900 million. It also surpassed the Zacks Consensus Estimate of $871.9 million.
Revenues by End Markets
The Industrial market generated 41% of Analog Devices’ total revenue (up 1.3% sequentially and 15.3% year over year). This represents a diversified market for the company, including industrial automation, instrumentation, energy, defense and health care segments.
Communications generated 18% of total revenue, up 1.3% sequentially and 3.5% year over year.
The Automotive segment generated around 14% of Analog Devices’ first quarter revenues, down 2.1% sequentially but up 9.5% year over year.
The Consumer segment, which Analog Devices clubs with its computing and handset businesses, decreased 8% sequentially but was up a massive 113.9% year over year. It accounted for 27% of total revenue.
Margins
Pro-forma gross margin was 66.1%, down 54 basis points (bps) sequentially but up 388 bps year over year. The year-over-year improvement was primarily backed by lower inventory reserves and higher utilization rates.
Analog Devices reported adjusted operating expenses of $306.5 million, up 7% sequentially and 15.8% year over year. Pro-forma operating margin of 35% was down 313 bps sequentially but up 715 bps year over year.
Net Profit
On a GAAP basis, Analog Devices recorded a net profit of $217.1 million or 69 cents per share compared with $164.5 million or 52 cents in the year-ago quarter.
The company generated adjusted net profit of $295 million compared with $180.1 million in the first quarter of fiscal 2016. Pro-forma earnings per share came in at 94 cents compared with 57 cents in the year-ago quarter.
Balance Sheet
Analog Devices exited the first quarter with cash and short-term investments of approximately $6.3 billion, up from $2.2 billion in the prior quarter. Accounts receivables were $472.5 million, down from $477.6 million in the previous quarter.
Long-term debt was approximately $3.8 billion, resulting in a net cash position of $2.5 billion.
Net cash flow from operations was around $314.4 million. Analog Devices spent $3.1 million on share repurchases and $129.7 million on cash dividends during the first quarter.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. Price, Consensus and EPS Surprise | Analog Devices, Inc. Quote
Guidance
For the second quarter of fiscal 2017, management expects revenues in a range of $870 million to $950 million. The Zacks Consensus Estimate is pegged at $877.2 million. On a non-GAAP basis, the company estimates gross margin of approximately 66.5% to 67.0%. Operating expenses are expected to be down 3% to up 1%. The company expects interest and other expense of approximately $30 million, tax rate of approximately 8% and earnings per share in a range of 74–86 cents. The Zacks Consensus Estimate is pegged at 77 cents.
Zacks Rank & Other Picks
Currently, Analog Devices has a Zacks Rank #2 (Buy). Other stocks worth considering in the broader technology sector include Xcerra Corporation , STMicroelectronics N.V. (STM - Free Report) and Texas Instruments Incorporated (TXN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
For the current year, the estimates for Xcerra stayed unchanged while the same for STMicroelectronics and Texas Instruments went up 15.3% and 6.7%, respectively in the past 30 days.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>