Analog Devices (ADI) Q4 Earnings & Revenues Beat, Rise Y/Y
Analog Devices Inc. ADI reported fourth-quarter fiscal 2022 adjusted earnings of $2.73 per share, beating the Zacks Consensus Estimate by 5.8%. The bottom line rose 58% from the year-ago fiscal quarter’s reported figure.
Revenues of $3.25 billion surpassed the Zacks Consensus Estimate of $3.16 billion. The top line improved 39% from the year-ago fiscal quarter’s reported figure.
The strong performance delivered by Analog Devices across the industrial, automotive, consumer and communications markets drove the top line.
Revenues by End Markets
Industrial: Analog Devices generated revenues of $1.66 billion (accounting for 51% of the total revenues), which grew 40% year over year.
Communications: Revenues from the market were $501.9 million (15% of revenues), increasing 42% from the year-ago fiscal quarter’s reported figure.
Automotive: Revenues from the market summed $672.3 million (21% of revenues), up 49% from the year-ago fiscal quarter’s level.
Consumer: The market generated revenues of $411.9 million (13% of revenues), reflecting 19% growth from the year-ago fiscal quarter’s tally.
Analog Devices, Inc. Price, Consensus and EPS Surprise
Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote
Operating Details
The adjusted gross margin expanded 310 basis points (bps) from the year-ago fiscal quarter’s level to 74%.
Adjusted operating expenses were $743.7 million, up 14.3% from the year-ago fiscal quarter’s level. As a percentage of revenues, adjusted operating expenses were 22.9%, contracting 490 bps year over year.
The adjusted operating margin expanded 800 bps on a year-over-year basis to 51.1% in the reported quarter.
Balance Sheet & Cash Flow
As of Oct 29, 2022, cash and cash equivalents were $1.47 billion, down from $1.52 billion as of Jul 30, 2022.
Long-term debt was $6.55 billion at the end of the fiscal fourth quarter compared with $6.25 billion at the end of the fiscal third quarter.
Net cash provided by operations was $1.15 million in the reported quarter, up from $1.25 billion in the prior fiscal quarter.
ADI generated $845 million of free cash flow in the fiscal fourth quarter.
Additionally, Analog Devices returned $1.21 billion to its shareholders in the fiscal fourth quarter, of which dividend payments accounted for $390 million and repurchased shares amounted to $818 million.
Guidance
For first-quarter fiscal 2023, ADI expects revenues of $3.15 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $3.06 billion.
Non-GAAP earnings are expected to be $2.60 (+/- $0.10) per share. The consensus mark for the same is pegged at $2.45 per share.
Analog Devices anticipates non-GAAP operating margins of 50% (+/- 70 bps).
Zacks Rank & Stocks to Consider
Currently, Analog Devices carries a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Computer & Technology sector can consider some other better-ranked stocks like Arista Networks ANET, Airbnb ABNB and Asure Software ASUR. While Arista Networks and Asure Software sport a Zacks Rank #1 (Strong Buy), Airbnb carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks has lost 6.4% in the year-to-date period. The long-term earnings growth rate for ANET is currently projected at 17.5%.
Airbnb has lost 42.5% in the year-to-date period. ABNB’s long-term earnings growth rate is currently projected at 20.7%.
Asure Software has lost 8.7% in the year-to-date period. The long-term earnings growth rate for ASUR is currently projected at 23%.
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