Broad-line semiconductor designer Analog Devices
What analysts say:
- Buy, sell, or waffle? Twenty-seven Wall Street analysts follow Analog Devices these days. Fourteen of them are buying, one is selling, and the other 12 are weighing their options in between. In our Motley Fool CAPS database, it's a three-star stock, with input from more than 150 investors like you and me.
- Revenue. Management is aiming for $640 million to $670 million of net sales. The analyst consensus lands in the middle of that range with $658 million, 2% above the $644 million produced last year.
- Earnings. Official guidance is pointing to GAAP earnings of $0.31 to $0.36 per share, and pro forma income around $0.37 to $0.42. Analyst estimates, which normally look at non-GAAP numbers when available, average out to $0.35 per share, down from $0.41 a year ago.
What management says:
CEO Jerald Fishman essentially called the bottom of the year-long industry slump when releasing those guidance ranges above. "Orders from customers and distributors began strengthening in January and have continued to be strong," he said, "which we believe is a positive sign of improving industry conditions. Therefore, we are planning for good growth in our second fiscal quarter."
What management does:
You can see strengthening margins across the board, except for the cash flow ratio. Even that weakness can be explained by higher capital expenditures, as ADI launched into an upgrade cycle for its manufacturing lines last year.
And if this is a company in a revenue trough, look out for some inspiring results when the downturn swings back up. Nearly 9% annual revenue growth isn't too shabby.
10/2005 |
1/2006 |
4/2006 |
7/2006 |
10/2006 |
2/2007 |
|
---|---|---|---|---|---|---|
Gross |
57.9% |
58.0% |
59.0% |
59.5% |
59.5% |
60.2% |
Operating |
23.1% |
23.9% |
25.2% |
26.1% |
26.0% |
26.6% |
Net |
17.4% |
17.6% |
18.5% |
18.8% |
21.4% |
22.0% |
FCF/Revenue |
24.6% |
26.7% |
27.2% |
21.4% |
19.1% |
19.2% |
Growth (YOY) |
10/2005 |
1/2006 |
4/2006 |
7/2006 |
10/2006 |
2/2007 |
---|---|---|---|---|---|---|
Revenue |
(9.3%) |
(6.9%) |
(2.5%) |
6.3% |
7.7% |
8.8% |
Earnings |
(27.3%) |
(23.8%) |
(13.3%) |
0.1% |
32.5% |
36.0% |
One Fool says:
This company is coming up against some easy year-ago comparisons now. Keeping in mind the positive attitude ADI and competitors like Texas Instruments
Then again, the stock price has jumped about 11% since the last earnings report, so I'm not the only one with high expectations.
Important customers like Nokia
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Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure will help you find the road ahead.