Analog Devices earnings, revenue top Q3 expectations

Analog Devices (NASDAQ:ADI ) shares rallied around 5.6% premarket Wednesday after reporting better-than-expected third-quarter earnings and revenue, along with an optimistic outlook for the fourth quarter.

The semiconductor company posted adjusted earnings per share of $1.58 for the quarter ended August 3, beating analysts' estimates of $1.51. Revenue came in at $2.31 billion, surpassing the consensus forecast of $2.27 billion but declining 25% YoY.

Despite the YoY revenue drop, Analog Devices' CEO and Chair Vincent Roche expressed confidence in the company's positioning amid a nascent recovery in the business cycle.

"Our high-performance analog solutions portfolio positions us well to intersect the strong underlying stream of concurrent secular trends," Roche stated.

For the fourth quarter, Analog Devices forecasts revenue between $2.3 billion and $2.5 billion, with the midpoint of $2.4 billion slightly above analysts' expectations of $2.37 billion. The company projects adjusted EPS in the range of $1.53 to $1.73, compared to the consensus estimate of $1.62.

CFO Richard Puccio noted improved customer inventory levels and order momentum across most markets, signaling sequential growth in the fourth quarter.

However, he cautioned that "economic and geopolitical uncertainty continues to limit the pace of the recovery."

The company's gross margin percentage for Q3 was 56.7%, down from 63.8% in the same quarter last year. Analog Devices returned $574 million to shareholders through dividends and stock repurchases during the quarter.

Source: Investing.com