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Analog Devices (ADI) Q2 Earnings Beat, Revenues Down Y/Y

·3 min read

Analog Devices Inc. ADI reported second-quarter fiscal 2020 adjusted earnings of $1.08 per share, beating the Zacks Consensus Estimate of $1.05. However, the bottom line decreased 21% year over year.

Revenues of $1.32 billion missed the Zacks Consensus Estimate of $1.33 billion. Also, the top line declined 14% year over year.

B2B revenues were up 3% sequentially on the communication and industrial sectors.

Operating Details

Non-GAAP gross margin contracted 290 basis points (bps) on a year-over-year basis to 67.7%.

Total operating expenses were $506.2 million, down 10.9% from the year-ago quarter.

Non-GAAP operating margin shrunk 350 bps on a year-over-year basis to 38% during the reported quarter.

Analog Devices, Inc. Price, Consensus and EPS Surprise

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

Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote

Balance Sheet & Cash Flow

At the end of the fiscal second quarter, cash and cash equivalents were $784.9 million, up from $654.4 million at the end of the fiscal first quarter.

Long-term debt was $5.1 billion, up from the previous quarter’s $4.7 billion.

Net cash provided by operations was $429 million in the fiscal second quarter, up from the $349.6 million witnessed in the last quarter.

The company generated $369 million of free cash flow during the fiscal second quarter.

Additionally, Analog Devices returned $343 million to shareholders through dividends and share repurchases in the reported quarter.


For third-quarter fiscal 2020, Analog Devices expects revenues to be $1.32 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.34 billion.

Non-GAAP earnings are estimated to be $1.08 (+/- $0.11) per share. The consensus mark for the same is pegged at $1.06 per share.

The company anticipates non-GAAP operating margins to be 38.3% (+/- 150 bps).

Zacks Rank & Key Picks

Analog Devices currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector include Wayfair Inc. W, MONOTARO MONOY and Inphi Corporation IPHI, each currently carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Wayfair, Inuvo, and Inphi is currently projected at 23.04%, 17.2% and 37.7%, respectively.

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