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Why Is Analog Devices (ADI) Down 2.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Analog Devices (ADI - Free Report) . Shares have lost about 2.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Analog Devices due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Analog Devices Beats Q3 Earnings & Revenue Estimates
Analog Devices Inc. reported third-quarter fiscal 2018 adjusted earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.46. Moreover, the bottom line increased 22% year over year and 6% sequentially. Also, the figure surpassed the guided range of $1.38-$1.52.
Revenues of $1.57 billion topped the consensus mark of $1.52 billion and came ahead of the guided range of $1.47-$1.55billion. Moreover, the top line improved 7.8% year over year and 3.9% sequentially.
The strong growth was driven by robust performance from industrial, automotive and communications end-markets.
The company has authorized to repurchase an additional $2 billion of its common stock.
Revenues by End Markets
Industrial revenues (50% of the total sales) soared 14% year over year and 1% sequentially to $793.3 million.
Communications revenues (21% of the total sales) grew 27% year over year and 12% sequentially to $323.9 million.
Automotive revenues (16% of the total sales) jumped 6% from the year-ago quarter and 3% from the last reported quarter to $246.9 million.
Consumer revenues (13% of the total sales) declined 17% year over year but increased 5% sequentially to $208.6 million.
Operating Details
Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis but decreased 10 bps sequentially to 71.2%.
Adjusted operating expenses, as a percentage of revenues, declined 150 bps from the year-ago quarter and 70 bps sequentially to 28.5%.
Non-GAAP operating margin expanded 220 bps on a year-over-year basis and 60 bps sequentially to 42.7%.
Balance Sheet & Cash Flow
Analog Devices exited the third quarter with cash and short-term investments of approximately $772.6 million, down from $806.5 million at the end of fiscal second quarter.
Long-term debt was approximately $6.5 billion, down from $6.93 billion at fiscal second quarter-end.
Net cash provided by operations was $620.7 million, down from $718.5 million reported in the fiscal second quarter.
Guidance
For the fourth quarter of fiscal 2018, Analog Devices expects revenues of $1.57 billion (+/- $40 million). The company projects interest and other expenses at approximately $57 million. Earnings are expected to be$1.52 (+/- $0.06) per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Analog Devices has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Analog Devices has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Analog Devices (ADI) Down 2.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Analog Devices (ADI - Free Report) . Shares have lost about 2.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Analog Devices due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Analog Devices Beats Q3 Earnings & Revenue Estimates
Analog Devices Inc. reported third-quarter fiscal 2018 adjusted earnings of $1.53 per share, beating the Zacks Consensus Estimate of $1.46. Moreover, the bottom line increased 22% year over year and 6% sequentially. Also, the figure surpassed the guided range of $1.38-$1.52.
Revenues of $1.57 billion topped the consensus mark of $1.52 billion and came ahead of the guided range of $1.47-$1.55billion. Moreover, the top line improved 7.8% year over year and 3.9% sequentially.
The strong growth was driven by robust performance from industrial, automotive and communications end-markets.
The company has authorized to repurchase an additional $2 billion of its common stock.
Revenues by End Markets
Industrial revenues (50% of the total sales) soared 14% year over year and 1% sequentially to $793.3 million.
Communications revenues (21% of the total sales) grew 27% year over year and 12% sequentially to $323.9 million.
Automotive revenues (16% of the total sales) jumped 6% from the year-ago quarter and 3% from the last reported quarter to $246.9 million.
Consumer revenues (13% of the total sales) declined 17% year over year but increased 5% sequentially to $208.6 million.
Operating Details
Non-GAAP gross margin expanded 70 basis points (bps) on a year-over-year basis but decreased 10 bps sequentially to 71.2%.
Adjusted operating expenses, as a percentage of revenues, declined 150 bps from the year-ago quarter and 70 bps sequentially to 28.5%.
Non-GAAP operating margin expanded 220 bps on a year-over-year basis and 60 bps sequentially to 42.7%.
Balance Sheet & Cash Flow
Analog Devices exited the third quarter with cash and short-term investments of approximately $772.6 million, down from $806.5 million at the end of fiscal second quarter.
Long-term debt was approximately $6.5 billion, down from $6.93 billion at fiscal second quarter-end.
Net cash provided by operations was $620.7 million, down from $718.5 million reported in the fiscal second quarter.
Guidance
For the fourth quarter of fiscal 2018, Analog Devices expects revenues of $1.57 billion (+/- $40 million). The company projects interest and other expenses at approximately $57 million. Earnings are expected to be$1.52 (+/- $0.06) per share.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Analog Devices has a nice Growth Score of B, a grade with the same score on the momentum front. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Analog Devices has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.