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Analog Devices (ADI) Beats Q2 Earnings, Revenue Estimates

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Analog Devices Inc. ADI reported second-quarter fiscal 2018 adjusted earnings of $1.45 per share, beating the Zacks Consensus Estimate by 8 cents. The bottom line surged 41% year over year and 3% sequentially. Also, the figure surpassed the guided range of $1.30-$1.44.

Revenues of $1.51 billion topped the consensus mark of $1.47 billion and came close to the higher end of the guided range of $1.43-$1.51 billion. Moreover, the top line surged 32% year over year but remained flat sequentially.

The strong year-over-year growth was driven by a robust performance from the industrial, automotive and communications end-markets.

The stock has slightly underperformed the industry in the past 12 months. It has gained 6.07% compared with the industry’s growth of 7.71%.

Revenues by End Markets

Industrial (52% of the total revenues) revenues soared 47% year over year and 6% sequentially to $788.3 million.

Communications (19% of the total revenues) revenues surged 34% year over year and 1% sequentially to $287.9 million.

Automotive (16% of the total revenues) revenues jumped 28% from the year-ago quarter but were down 6% from the last reported quarter to $238.8 million.

Consumer (13% of the total revenues) revenues declined 6% year over year and 17% sequentially to $198.1 million.

Operating Details

Non-GAAP gross margin expanded 200 basis points (bps) on a year-over-year basis and 30 bps sequentially to 71.3%.

Adjusted operating expenses, as a percentage of revenues, declined 220 bps from the year-ago quarter and 20 bps sequentially to 29.2%.

Non-GAAP operating margin expanded 420 bps on a year-over-year basis and 40 bps sequentially to 42.1%.

Balance Sheet & Cash Flow

Analog Devices exited the second quarter with cash and short-term investments of approximately $806.5 million, down from $827.6 million at the end of the prior quarter.

Long-term debt was approximately $6.93 billion, down from $7.38 billion at the end of the last reported quarter.

Net cash provided by operations was $718.5 million, up from $388.7 million reported in the fiscal first quarter.


For the third quarter of fiscal 2018, Analog Devices expects revenues between $1.47 billion and $1.55 billion. The Zacks Consensus Estimate stands at $1.49 billion.

Analog Devices projects interest and other expense of approximately $58 million.

Earnings are expected in the band of $1.38-$1.52 per share. The consensus mark for the same is pegged at $1.39.

Analog Devices, Inc. Price, Consensus and EPS Surprise


Analog Devices, Inc. Price, Consensus and EPS Surprise | Analog Devices, Inc. Quote

Zacks Rank &Other Stocks to Consider

Currently, Analog Devices holds a Zacks Rank #2 (Buy).Other top-ranked stocks in the technology sector are Littelfuse, Inc. (LFUS - Free Report) , SMC Corporation SMCAY and, Inc. AMZN, eachsporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings per share growth rate for Littelfuse, SMC and Amazon is projected at 12%, 13.7% and 30.2%, respectively.

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