Analog Devices Inc (ADI) Reports Fiscal Q4 and Record FY 2023 Results Amidst Challenging ...
ADI reports a 2% year-over-year increase in fiscal 2023 revenue, reaching $12.3 billion.
Operating cash flow hit $4.8 billion with free cash flow of $3.6 billion for fiscal 2023.
Despite a challenging macroeconomic environment, ADI returned over $4.6 billion to shareholders in fiscal 2023.
Fourth quarter revenue of $2.7 billion, with Automotive continuing to see double-digit year-over-year growth.
On November 21, 2023, Analog Devices Inc (NASDAQ:ADI) released its 8-K filing, announcing financial results for the fourth quarter and fiscal year 2023, which ended on October 28, 2023. ADI's CEO and Chair, Vincent Roche, acknowledged the company's revenue and profitability exceeded the midpoint of their outlook, despite the difficult macroeconomic environment. Roche also highlighted the company's resilience and focus on execution excellence, which he believes will support operating margins and free cash flow.
Fiscal 2023 Financial Highlights
ADI reported a fiscal 2023 revenue of $12.3 billion, a 2% increase from the previous year, driven by new records in the Industrial and Automotive sectors. The company's gross margin rose by 5% to $7.9 billion, with the gross margin percentage increasing by 130 basis points to 64%. Operating income saw a significant 17% increase to $3.8 billion, with operating margin expanding by 380 basis points to 31.1%. Diluted earnings per share (EPS) also grew by 25% to $6.55.
Q4 Fiscal 2023 Performance
For the fourth quarter, ADI reported revenue of $2.7 billion, with the Automotive sector continuing to experience double-digit year-over-year growth. The gross margin for the quarter was $1.6 billion, a decrease of 23% from the same period last year, and the gross margin percentage decreased by 540 basis points to 60.6%. Operating income for the quarter was $634 million, a 42% decrease year-over-year, and operating margin decreased by 1,050 basis points to 23.4%. Diluted EPS for the quarter was $1.00, a 45% decrease from the previous year.
Cash Flow and Shareholder Returns
ADI's operating cash flow for fiscal 2023 was robust at $4.8 billion, with free cash flow reaching $3.6 billion. The company has been proactive in returning value to shareholders, with more than $4.6 billion returned in fiscal 2023, including $3.0 billion in share repurchases and $1.7 billion in dividends.
Balance Sheet and Cash Flow Statements
As of October 28, 2023, ADI's balance sheet showed cash and cash equivalents of $958 million, with accounts receivable and inventories amounting to $1.5 billion and $1.6 billion, respectively. Total assets were valued at $48.8 billion. The company's cash flow statements reflected a net cash provided by operating activities of $1.2 billion for the quarter and $4.8 billion for the twelve months ended October 28, 2023.
Outlook and Dividend Payment
Looking ahead to the first quarter of fiscal 2024, ADI forecasts revenue of $2.5 billion, with an expected reported operating margin of approximately 23.1% and adjusted operating margin of approximately 41.5%. The company anticipates reported EPS to be $0.91 and adjusted EPS to be $1.70. Additionally, ADI's Board of Directors has declared a quarterly cash dividend of $0.86 per outstanding share of common stock, payable on December 14, 2023, to shareholders of record as of December 4, 2023.
ADI's performance in fiscal 2023 demonstrates the company's ability to navigate a challenging economic landscape while continuing to deliver value to shareholders. With a focus on strategic investment and innovation, ADI is positioned to leverage its strengths and drive shareholder value in the coming years.
Explore the complete 8-K earnings release (here) from Analog Devices Inc for further details.
This article first appeared on GuruFocus.
