Analog Devices, Inc. Posts Better Than Expected Q2 Results

Updated on

By Carly Forster 

Analog Devices, Inc. (NASDAQ:ADI) is a Norwood, Massachusetts based American multinational semiconductor company that specializes in data conversion and signal conditioning technology in factory automation systems and portable electronic devices (such as smartphones and tablets). The company reported its second quarter earnings report on Tuesday, May 20th and their results were better than expected.

During its Q2 results, Analog Devices, Inc. (NASDAQ:ADI) reported $0.59 earnings per share, beating analysts’ consensus estimate of $0.56 by $0.03. During the same quarter last year, the company posted $0.52 earnings per share. Analog Devices had profits of $694.54 million for the quarter, compared to analysts’ consensus estimate of $670.93 million. The company’s quarterly proceeds were up 5.4% on a year-over-year basis. On average, analysts predict that Analog Devices, Inc. will post $2.29 earnings per share for the current fiscal year.

Analog Devices, Inc. (NASDAQ:ADI) fiscal second-quarter revenue increased 14%, beating the company’s own expectations. Chief Executive Vincent Roche noted, “We had a very good second quarter, with our performance ahead of expectations. Our growth this quarter was broad-based, fueled by secular and seasonal strength, particularly in the industrial, communications infrastructure, and automotive markets, which accounted for 89% of our sales. We expect these trends to continue into the third quarter driving sequential revenue growth of 1% to 5% with strong profitability.”

Shares of Analog Devices, Inc. (NASDAQ:ADI) opened at $51.35 on Wednesday, May 21. The company has a 1-year high of $54.40 and a 1-year low of $43.86. The stock’s daily moving average is $51.65 and has a 50-day moving average of $52.20. The market cap for Analog Devices, Inc. is $16.16 billion and its P/E ratio is 23.52.

On May 19, RBC Capital analyst Doug Freedman gave a sector-perform rating on ADI. He explained, “the growth phase is transitioning into a more mature era” and “lower capital investments are needed as today’s capacity is sufficient to meet demand” and “we are likely to see greater FCF generation in the industry with companies endorsing shareholder-friendly capital-allocation strategies.” Freedman has a +9.1% average return and a 71% success rate according to TipRanks.

On May 21, Morgan Stanley analyst Craig Hettenbach also reiterated an equal-weight rating for the stock. He reasoned, “while the board is consistently raising the dividend, buyback activity is underwhelming at $23mn in the quarter and $150mn in the past year.” Hettenbach has a +6.8% average return and a 76% success rate.

On the other hand, on May 21 Jefferies analyst Mark Lipacis reaffirmed a BUY rating with a $60 price objective. Lipacis has a +2.6% average return and a 58% success rate.

Analog Devices, Inc. (NASDAQ:ADI) currently has an analyst consensus of HOLD.

Analog Devices HOLD

Carly Forster writes about stock market news. She can be reached at [email protected]

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