Analog Devices Meets on the Top Line, Misses Where it Counts

Analog Devices (Nasdaq: ADI  ) reported earnings on May 21. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended May 4 (Q2), Analog Devices met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue contracted slightly. Non-GAAP earnings per share dropped. GAAP earnings per share shrank.

Gross margins shrank, operating margins dropped, net margins expanded.

Revenue details
Analog Devices notched revenue of $659.3 million. The 25 analysts polled by S&P Capital IQ hoped for revenue of $660.4 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

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 $0.50. The 25 earnings estimates compiled by S&P Capital IQ predicted $0.52 per share. Non-GAAP EPS of $0.50 for Q2 were 5.7% lower than the prior-year quarter's $0.53 per share. GAAP EPS of $0.52 for Q2 were 1.9% lower than the prior-year quarter's $0.53 per share.

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 64.0%, 120 basis points worse than the prior-year quarter. Operating margin was 29.0%, 250 basis points worse than the prior-year quarter. Net margin was 24.9%, 80 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $688.2 million. On the bottom line, the average EPS estimate is $0.57.

Next year's average estimate for revenue is $2.69 billion. The average EPS estimate is $2.17.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 360 members out of 397 rating the stock outperform, and 37 members rating it underperform. Among 114 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 102 give Analog Devices a green thumbs-up, and 12 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 $48.00.

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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. 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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