Analog Devices, Inc. ADI is slated to report second-quarter fiscal 2019 results on May 22, before the opening bell.
The company’s earnings surprise history has been impressive, as it surpassed estimates in each of the last four quarters, with an average of 4.13%.
Let’s see how things are shaping up for this announcement.
Factors at Play
Analog Devices has been benefiting from strength in industrial, automotive, consumer and communications markets, along with increased focus on innovation and operational execution. These are positives for the to-be-reported quarter as well.
The automotive electronics market should continue to gain from consumer demand for added technology and features in new vehicles, along with the transition to hybrid and electric vehicles. Therefore, we expect automotive revenues to further increase in the to-be-reported quarter. The Zacks Consensus Estimate for automotive revenues is pegged at $251 million.
Also, the communications market should perform well in the quarter to be reported, driven by strength in the wireless segment. The accelerated build out of TD-LTE in China, continuing 4G network densification activities in the United States and expected deployments in Europe should benefit the communications segment. The Zacks Consensus Estimate for communications is pegged at $349 million.
However, softness in the consumer market is a major negative. Also, macroeconomic headwinds and geopolitical uncertainty remained overhangs during the quarter. Further, rising competitive pressure from Maxim and Texas Instruments may impact the upcoming results.
For the fiscal second quarter, the Zacks Consensus Estimate for industrial and consumer is pegged at $746 million and $155 million, respectively.
Per our proven model, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to beat earnings estimates. That is not the case here as you will see below.
Earnings ESP: The Earnings ESP for the stock is 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, which when combined with a 0.00% ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement.
Analog Devices, Inc. Price and EPS Surprise
Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote
Stocks to Consider
We see a likely earnings beat for each of the following companies in the upcoming releases:
Intuit Inc. INTU has an Earnings ESP of +0.59% and a Zacks Rank #2.
Autodesk, Inc. ADSK has an Earnings ESP of +0.18% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Netflix, Inc. NFLX has an Earnings ESP of +1.03% and a Zacks Rank #3.
This Could Be the Fastest Way to Grow Wealth in 2019
Research indicates one sector is poised to deliver a crop of the best-performing stocks you'll find anywhere in the market. Breaking news in this space frequently creates quick double- and triple-digit profit opportunities.
These companies are changing the world – and owning their stocks could transform your portfolio in 2019 and beyond. Recent trades from this sector have generated +98%, +119% and +164% gains in as little as 1 month.
Click here to see these breakthrough stocks now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Autodesk, Inc. (ADSK) : Free Stock Analysis Report
Intuit Inc. (INTU) : Free Stock Analysis Report
Analog Devices, Inc. (ADI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research