Analog Devices (ADI) Q3 Earnings Beat, Revenues Rise Y/Y


Analog Devices Inc. (ADI Quick QuoteADI ) has reported third-quarter fiscal 2021 adjusted earnings of $1.72 per share, beating the Zacks Consensus Estimate by 6.8%. Further, the bottom line increased 26% year over year and 11.7% sequentially.

Revenues of $1.76 billion surpassed the Zacks Consensus Estimate of $1.71 billion. Also, the top line improved 21% year over year and 5.9% from the second-quarter fiscal 2021 level.

The strong performance delivered by the company across the consumer, industrial and automotive markets drove the top line.

Revenues by End Markets

Industrial: The company generated revenues of $1 billion (accounting for 57% of total revenues), which grew 29% year over year.

Communications: Revenues from the market were $288.7 million (16% of revenues), decreasing 21% year over year.

Automotive: Revenues from the market summed $290.1 million (16% of revenues), up 80% from the year-ago quarter.

Consumer: The market generated revenues of $178.2 million (10% of revenues), reflecting 16% growth on a year-over-year basis.

Analog Devices, Inc. Price, Consensus and EPS Surprise


Analog Devices, Inc. Price, Consensus and EPS Surprise

Analog Devices, Inc. price-consensus-eps-surprise-chart | Analog Devices, Inc. Quote

Operating Details

Adjusted gross margin expanded 170 basis points (bps) on a year-over-year basis to 71.6%.

Adjusted operating expenses were $492.7 million, up 22.6% from the year-ago quarter. As a percentage of revenues, adjusted operating expenses were 28%, expanding 40 bps year over year.

Adjusted operating margin expanded 130 bps on a year-over-year basis to 43.6% in the reported quarter.

Balance Sheet & Cash Flow

As of Jul 31, 2021, cash and cash equivalents were $1.5 billion, up from $1.3 billion as of May 1, 2021.

Long-term debt was $3.825 billion at the end of the fiscal third quarter compared with $3.824 billion at the end of the fiscal second quarter.

Net cash provided by operations was $630.04 million in the reported quarter, down from $736.4 million in the prior quarter.

The company generated $544 million of free cash flow in the fiscal third quarter.

Additionally, Analog Devices returned $418 million to its shareholders of which it made dividend payments of $255 million and repurchased shares worth $163 million in the fiscal third quarter.


For fourth-quarter fiscal 2021, the company expects revenues of $1.78 billion (+/- $70 million). The Zacks Consensus Estimate for the same is pegged at $1.75 billion.

Non-GAAP earnings are expected to be $1.72 (+/- $0.11) per share. The consensus mark for the same is pegged at $1.68 per share.

The company anticipates non-GAAP operating margins of 43.7% (+/- 100 bps).

Zacks Rank & Stocks to Consider

Currently, Analog Devices carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector include Digital Turbine (APPS Quick QuoteAPPS ) , Advanced Micro Devices (AMD Quick QuoteAMD ) and ASML Holding N.V. (ASML Quick QuoteASML ) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Digital Turbine, Advanced Micro Devices and ASML Holding are currently projected at 50%, 44.6% and 33.5%, respectively.

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