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Analog Devices (ADI) Q4 Earnings & Revenues Beat, Rise Y/Y

Analog Devices Inc. ADI reported fourth-quarter fiscal 2022 adjusted earnings of $2.73 per share, beating the Zacks Consensus Estimate by 5.8%. The bottom line rose 58% from the year-ago fiscal quarter’s reported figure.

Revenues of $3.25 billion surpassed the Zacks Consensus Estimate of $3.16 billion. The top line improved 39% from the year-ago fiscal quarter’s reported figure.

The strong performance delivered by Analog Devices across the industrial, automotive, consumer and communications markets drove the top line.

Revenues by End Markets

Industrial: Analog Devices generated revenues of $1.66 billion (accounting for 51% of the total revenues), which grew 40% year over year.

Communications: Revenues from the market were $501.9 million (15% of revenues), increasing 42% from the year-ago fiscal quarter’s reported figure.

Automotive: Revenues from the market summed $672.3 million (21% of revenues), up 49% from the year-ago fiscal quarter’s level.

Consumer: The market generated revenues of $411.9 million (13% of revenues), reflecting 19% growth from the year-ago fiscal quarter’s tally.

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

Operating Details

The adjusted gross margin expanded 310 basis points (bps) from the year-ago fiscal quarter’s level to 74%.

Adjusted operating expenses were $743.7 million, up 14.3% from the year-ago fiscal quarter’s level. As a percentage of revenues, adjusted operating expenses were 22.9%, contracting 490 bps year over year.

The adjusted operating margin expanded 800 bps on a year-over-year basis to 51.1% in the reported quarter.

Balance Sheet & Cash Flow

As of Oct 29, 2022, cash and cash equivalents were $1.47 billion, down from $1.52 billion as of Jul 30, 2022.

Long-term debt was $6.55 billion at the end of the fiscal fourth quarter compared with $6.25 billion at the end of the fiscal third quarter.

Net cash provided by operations was $1.15 million in the reported quarter, up from $1.25 billion in the prior fiscal quarter.

ADI generated $845 million of free cash flow in the fiscal fourth quarter.

Additionally, Analog Devices returned $1.21 billion to its shareholders in the fiscal fourth quarter, of which dividend payments accounted for $390 million and repurchased shares amounted to $818 million.

Guidance

For first-quarter fiscal 2023, ADI expects revenues of $3.15 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $3.06 billion.

Non-GAAP earnings are expected to be $2.60 (+/- $0.10) per share. The consensus mark for the same is pegged at $2.45 per share.

Analog Devices anticipates non-GAAP operating margins of 50% (+/- 70 bps).

Zacks Rank & Stocks to Consider

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

Investors interested in the broader Zacks Computer & Technology sector can consider some other better-ranked stocks like Arista Networks ANET, Airbnb ABNB and Asure Software ASUR. While Arista Networks and Asure Software sport a Zacks Rank #1 (Strong Buy), Airbnb carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks has lost 6.4% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 17.5%.

Airbnb has lost 42.5% in the year-to-date period. ABNB’s long-term earnings growth rate is currently projected at 20.7%.

Asure Software has lost 8.7% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 23%.

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