Analog Devices Q4 Earnings Beat: Will Dim Outlook Pull the Stock Down?

Analog Devices ADI reported fourth-quarter fiscal 2024 non-GAAP earnings of $1.67 per share, which surpassed the Zacks Consensus Estimate by 1.83%. The bottom line came at the midpoint of management’s guidance but declined 16.9% year over yearAnalog Devices’ earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 4.9%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Analog Devices’ fourth-quarter fiscal 2024 revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.5% and came in line with management’s guidanceWhile the consumer end market delivered a strong performance, the persistent weakness in the industrial, communications and automotive sectors has resulted in a 10% year-over-year decline in the top line.Despite reporting better-than-expected financial results, Analog Devices provided pessimistic guidance for the first quarter of fiscal 2025. Its top and bottom-line forecasts for the first quarter fell short of the respective Zacks Consensus Estimate.The dull outlook is likely to further pull down ADI’s share price. Shares of ADI have lost 6.2% in the past six months against the Zacks Computer and Technology sector’s return of 8.1%.Analog Devices’ Q4 DetailsStronger-than-expected performance in the consumer market was suppressed by softness in three other segments — industrial, communications and automotive.Industrial: This end market generated revenues of $1.07 billion (accounting for 44% of the total revenues), which fell 21% year over year. The figure missed the Zacks Consensus Estimate of $1.13 million. Communications: Revenues from the market were $275.6 million (11% of revenues), which decreased 18% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $270 million. Analog Devices, Inc. Price, Consensus and EPS Surprise Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. QuoteAutomotive: Revenues from the market summed up to $717 million (29% of revenues), down 2% from the year-ago quarter. The figure surpassed the Zacks Consensus Estimate of $662 million. Consumer: The market generated revenues of $379.7 million (16% of revenues), reflecting 31% growth from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $340 million.The adjusted gross margin contracted 230 basis points (bps) from the year-ago quarter to 67.9%. The adjusted operating margin was 41.1% in the reported quarter, which contracted 360 bps from the year-ago quarter.ADI’s FY24 Performance in BriefAnalog Devices’ fiscal 2024 total revenues declined 23% year over year to $9.43 billion. However, the top line surpassed the Zacks Consensus Estimate of $9.39 billion. The industrial market generated $4.3 billion. The automotive market reported revenues of $2.83 billion, followed by communications and consumers with $1.1 billion and $1.2 billion, respectively.Analog Devices posted non-GAAP earnings of $6.38 per share for fiscal 2024, down 37% from earnings of $10.09 in fiscal 2023. However, earnings surpassed the consensus mark of $6.34 per share.Analog Devices’ Balance Sheet & Cash FlowAs of Nov. 2, 2024, cash and cash equivalents, and short-term investments were $2.4 billion, down from $2.54 billion as of Aug. 3, 2024.The long-term debt was $6.63 billion at the end of fourth-quarter fiscal 2024, slightly lower than $6.66 billion at the end of third quarter.Analog Devices generated operating cash flow and free cash flow of $1.05 billion and $855 million, respectively in the fourth quarter. The operating cash flow was $3.9 billion and the free cash flow was $3.1 billion for the fiscal 2024.During the fourth quarter, it repurchased shares worth $95 million and paid $457 million in dividends. In fiscal 2024, ADI returned more than $2.4 billion to shareholders, including $616 million in share repurchases and $1.8 billion in dividends.ADI’s Offers Dull Q1 GuidanceFor first-quarter fiscal 2025, management expects net sales of $2.35 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.36 billion, indicating a year-over-year decline of 6.1%.The company anticipates a non-GAAP operating margin of 40% (+/- 100 bps).Non-GAAP earnings are expected to be $1.53 (+/-10 cents) per share. The consensus mark for the same is pinned at $1.58 per share, unchanged over the past 60 days, indicating a year-over-year decline of 8.7%.Zacks Rank & Stocks to ConsiderCurrently, ADI carries a Zacks Rank #4 (Sell).Agilysys AGYS, AudioEye AEYE and Amphenol APH are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. AGYS, AEYE and APH sport a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.AGYS shares have surged 62.4% year to date. The Zacks Consensus Estimate for BB’s full-year fiscal 2025 earnings is pegged at $1.31 per share, up by 9.2% over the past 60 days, indicating a gain of 19.1% from the year-ago quarter’s reported figure.AEYE shares have reached a whopping 385.1% year to date. The Zacks Consensus Estimate for AEYE’s full-year 2024 earnings is pegged at 52 cents per share, up by a couple of pennies over the past 60 days, indicating a gain of 372.7% from the year-ago quarter’s reported figure.APH shares have gained 47.8% year to date. The Zacks Consensus Estimate for APH’s full-year 2024 earnings is pegged at $1.84 per share, up by a couple of pennies over the past 60 days, indicating a gain of 21.9% from the year-ago quarter’s reported figure.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Analog Devices, Inc. (ADI): Free Stock Analysis Report Amphenol Corporation (APH): Free Stock Analysis Report Agilysys, Inc. (AGYS): Free Stock Analysis Report Audioeye, Inc. (AEYE): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks