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Analog Devices (ADI) Beats Q4 Earnings, Revenue Estimates

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Analog Devices Inc. (ADI - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of $1.55 per share, beating the Zacks Consensus Estimate of $1.52. Moreover, the bottom line increased 6.9% year over year and 1.3% sequentially.

Revenues of $1.6 billion topped the consensus mark of $1.57 billion. Moreover, the top line improved 3.6% year over year and 1.5% sequentially.

The strong growth was driven by robust performance from industrial and communications end-markets.

Coming to share price performance, the stock has lost 4% on a year-to-date basis compared with the industry’s decline of 10.8%.

Revenues by End Markets

Industrial revenues (49% of the total sales) soared 10% year over year to $788.4 million.

Communications revenues (22% of the total sales) grew 29% year over year and 8% sequentially to $352.2 million.

Automotive revenues (15% of the total sales) jumped 2% from the year-ago quarter but declined 1% from the fiscal third quarter to $245.4 million.

Consumer revenues (13% of the total sales) declined 33% year over year but increased 1% sequentially to $210.7 million.

Operating Details

Non-GAAP gross margin expanded 30 basis points (bps) on a year-over-year basis to 71.2%.

Adjusted operating expenses, as a percentage of revenues, expanded 10 bps from the year-ago quarter but declined 20 bps sequentially to 28.3%.

Non-GAAP operating margin expanded 40 bps on a year-over-year basis and 30 bps sequentially to 43%.

Balance Sheet & Cash Flow

Analog Devices exited the fiscal fourth quarter with cash and cash equivalents of approximately $816.6 million, up from $772.6 million at the end of fiscal third quarter.

Long-term debt was approximately $6.3 billion, down from $6.5 billion at fiscal third quarter-end.

Net cash provided by operations was $714.4 million, up from $620.7 million reported in the fiscal third quarter.

In addition, the company returned $364 million to its shareholders through dividends and share repurchases.

Guidance

For the first quarter of fiscal 2019, Analog Devices expects revenues to be $1.51 billion (+/- $50 million). The Zacks Consensus Estimate for the same stands at $1.51 billion. Non-GAAP gross margins are expected to be approximately 70.8% (+/- 20 bp).

Interest and other expenses of the company are projected at approximately $56 million.

Non-GAAP earnings are expected to be $1.28 (+/- $0.07) per share. The consensus mark for the same is pegged at $1.34 per share.

Analog Devices, Inc. Price, Consensus and EPS Surprise

 

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

Zacks Rank & Stocks to Consider

Currently, Analog Devices has a Zacks Rank #3 (Hold).Some better-ranked stocks in the broader technology sector include boohoo group plc (BHOOY - Free Report) , QuinStreet, Inc. (QNST - Free Report) and AMETEK, Inc. (AME - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for boohoo group, QuinStreet and AMETEK is currently pegged at 25%, 25% and 11.18%, respectively.

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