Analog Devices’ Earnings Beat Estimates as Sales Grew Nearly 12%

analog devices logoMicrochip maker Analog Devices, Inc.(NASDAQ:ADI) this morning posted impressive fiscal Q3 earnings results, led by double-digit sales growth, and issued solid Q4 guidance.

The Norwood, MA-based company reported fiscal third quarter net income of $0.82 per share, easily beating Wall Street’s estimate of $0.76. Revenue rose 11.7% from last year to $869.59 million, also eclipsing analysts’ view of $849.9 million.

Looking ahead, ADI forecast adjusted Q4 EPS of $0.84-0.94, which straddles analyst estimates of $0.89 for the quarter. Q4 revenue guidance is for $910-970 million, versus Wall Street’s $933.96 million estimate.

Other interesting notes from the report included:

  • Q3 gross margin was 65.8%.
  • Q3 operating margin was 30.9%.
  • ADI ended fiscal Q3 with $1.1 billion in cash and equivalents.
  • Company declared a $0.42 cash dividend to be paid Sept. 7 with a record date of Aug. 26.

From the press release:

“We executed well in the third quarter and delivered revenue and diluted earnings per share results that exceeded our revised guidance,” said Vincent Roche, President and CEO. “During the quarter, we also announced the proposed acquisition of Linear Technology Corporation, a combination that will create a trusted analog industry leader, capable of delivering tremendous benefits to our customers, our employees, and our shareholders.”

“Looking ahead to the October quarter, we are planning for revenue to increase sequentially, and be in the range of $910 million to $970 million. By end market, we expect the industrial, automotive, and communications infrastructure markets, in the aggregate, to remain largely stable to their third quarter levels, and to increase in the low-to-mid-single digits compared to the prior year. In the consumer market, strong customer demand in the portables sector leads us to plan for continued sequential revenue growth in this market.”

Analog Devices shares rose $0.86 (+1.33%) to $65.74 in premarket trading. ADI stock has gained more than 17% since the start of 2016, more than doubling the performance of the S&P 500 in the same timeframe.


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