Analog Devices CEO says ‘we are well positioned’ after Q1 earnings

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on Feb 21, 2024
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  • Analog Devices reported its financial results for the first quarter today.
  • Here's what its CEO Vincent Roche said in a press release on Wednesday.
  • Analog Devices stock is currently up over 20% versus late October.

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Analog Devices Inc (NASDAQ: ADI) is trading down in premarket on Wednesday even though it came in slightly above Street estimates in its fiscal first quarter.

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Why is Analog Devices stock down today?

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Investors are concerned also because the management issued muted guidance for the future. Analog Devices now forecasts $1.26 of adjusted per-share earnings on $2.10 billion in revenue.

Analysts, in comparison, were at $1.26 a share and $2.30 billion, respectively. Vincent Roche – the chief executive of Analog Devices said in a press release today:

We expect customer inventory rationalization to largely subside in our second quarter, and thus enter the second half in a more favorable business backdrop.

$ADI expects its operating margin (adjusted) to sit at about 37% in the current quarter. Shares of the semiconductor giant are now up over 20% versus late October.

Analog Devices Q1 earnings snapshot

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  • Earned $586 million versus the year-ago $1.13 billion
  • Per-share earnings also declined from $1.88 to 93 cents
  • Adjusted EPS printed at $1.73 as per the earnings report
  • Revenue tanked 23% year-over-year to $2.51 billion
  • Consensus was $1.71 a share on $2.50 billion revenue

Analog Devices reported $3.2 billion of free cash flow for its recently concluded quarter. CEO Roche also said on Wednesday:

We are well positioned to capitalize on the inevitable upswing given our replenished die banks, short lead times, and agile hybrid manufacturing model.

Analog Devices raises dividend

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Analog Devices did, however, raised its quarterly dividend by 7.0% to 92 cents a share on Wednesday. According to the chief executive:

[Our dividend record] is a testament to $ADI’s enduring business qualities which have enabled positive free cash flow generation for 27 consecutive years.

Also today, the Nasdaq-listed firm named Richard C. Puccio is new chief financial officer. Wall Street currently has a consensus “overweight” rating on shares of Analog Devices.

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