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Analog Devices (ADI) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

Analog Devices, Inc. ADI is slated to report second-quarter fiscal 2020 results on May 20, before the opening bell. In the last reported quarter, it delivered a positive earnings surprise of 3%.

The stock outperformed earnings estimates thrice and missed once in the last four quarters, with the average positive surprise being 2.3%.

Trend in Estimate Revision

For the fiscal second quarter, the Zacks Consensus Estimate for earnings has remained stable at $1.04 per share over the past 30 days. This indicates a decline of 23.5% from the year-ago reported figure.

The consensus mark for revenues is pegged at $1.32 billion, implying a decline of 13.4% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Factors to Note

The company’s fiscal second-quarter sales might have been affected by the global coronavirus-led economic crisis. It faced disruptions in manufacturing operations, which may have further impacted top-line growth.

Nevertheless, strength in the company’s industrial, automotive, and communications markets, along with increased focus on innovation and operational execution are expected to reflect on the upcoming results.

The automotive electronics market is likely to have gained from consumer demand for added technology and features in new vehicles, along with the transition to hybrid and electric vehicles.

The communications market is anticipated to have performed well in the quarter to be reported, driven by strength of the wireless segment. The accelerated build out of TD-LTE in China, continuing 5G network densification activities in the United States and deployments in Europe are expected to have benefited the communications segment.

However, softness in the consumer market might have been a major concern. Also, macroeconomic headwinds and uncertainty related to COVID-19 are likely to have remained overhangs during the quarter.

Further, rising competitive pressure from Maxim and Texas Instruments may reflect on its upcoming results.

Analog Devices Inc Price and EPS Surprise


Analog Devices Inc Price and EPS Surprise

Analog Devices Inc price-eps-surprise | Analog Devices Inc Quote

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Analog Devices this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Analog Devices has a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

NVIDIA Corporation NVDA has an Earnings ESP of +0.15% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shopify Inc. SHOP has an Earnings ESP of +40.25% and a Zacks Rank #2.

Inphi Corporation IPHI has an Earnings ESP of +3.96% and is a Zacks #2 Ranked stock.

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