Analog Devices, Inc. ADI is slated to report third-quarter fiscal 2020 results on Aug 19, before the opening bell. In the last reported quarter, it delivered an earnings surprise of 3%.
The stock outperformed earnings estimates thrice and missed once in the last four quarters, with the average surprise being 1.9%.
Trend in Estimate Revision
For the fiscal third quarter, the Zacks Consensus Estimate for earnings has increased 22% to $1.33 per share over the past 30 days. This indicates growth of 5.56% from the year-ago reported figure.
The consensus mark for revenues is pegged at $1.45 billion, implying a decline of 1.98% from the year-ago reported figure.
Let’s see how things have shaped up for this announcement.
Analog Devices, Inc. Price and EPS Surprise
Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote
Factors to Note
During the quarter, Analog Devices enhanced health care solutions needed in the fight against the COVID-19 pandemic. These solutions were used in products such as ventilators, respirators, imaging systems and patient monitors. This is expected to have increased the company’s top-line growth.
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.
Nevertheless, strength in the company’s industrial segment and increased focus on innovation and operational execution are expected to reflect on the upcoming results. Also, 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 Zacks Consensus Estimate for communications revenues is pegged at $330 million, indicating growth of 12.2% year over year. The consensus estimate for revenues from the automotive market is pegged at $179 million, indicating a decline of 21.5% year over year. The consensus mark for revenues from the consumer market is pegged at $163 million, indicating a decline of 10.9% year over year. The same for revenues from the industrial market is pegged at $760 million, indicating growth of 0.9% year over year
However, the global coronavirus-led economic crisis might have impacted the company’s fiscal third-quarter sales to some extent.
Also, softness in the consumer market might have been a major concern.
Further, macroeconomic headwinds and rising competitive pressure from Maxim as well as Texas Instruments may reflect on its upcoming results.
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 #2.
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.
Agilent Technologies A has an Earnings ESP of +5.00% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk ADSK has an Earnings ESP of +4.44% and carries a Zacks Rank of 2, currently.
Alibaba Group BABA has an Earnings ESP of +2.16% and currently carries a Zacks Rank of 3.
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