Analog Devices Beats on Both Top and Bottom Lines

Seth Jayson, The Motley Fool
Updated

Analog Devices (NAS: ADI) reported earnings on May 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 5 (Q2), Analog Devices beat expectations on both revenue and earnings per share.

Compared to the prior-year quarter, both revenue and GAAP earnings per share shrank.


Margins dropped across the board.

Revenue details
Analog Devices booked revenue of $675.1 million. The 22 analysts polled by S&P Capital IQ looked for revenue of $665.7 million on the same basis. GAAP-reported sales were 15% lower than the prior-year quarter's $790.8 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.53. The 21 earnings estimates compiled by S&P Capital IQ anticipated $0.51 per share. GAAP EPS of $0.53 for Q2 were 32% lower than the prior-year quarter's $0.78 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 65.2%, 240 basis points worse than the prior-year quarter. Operating margin was 31.5%, 620 basis points worse than the prior-year quarter. Net margin was 24.1%, 650 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $695.3 million. On the bottom line, the average EPS estimate is $0.57.

Next year's average estimate for revenue is $2.75 billion. The average EPS estimate is $2.18.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 383 members rating the stock outperform and 31 members rating it underperform. Among 113 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 105 give Analog Devices a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Analog Devices is outperform, with an average price target of $42.60.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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