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Analog Devices (ADI) Q4 Earnings Beat, Revenues Rise Y/Y

Analog Devices' (ADI) fourth-quarter fiscal 2021 results reflect strength across the consumer, industrial, communications and automotive end markets.

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This story originally appeared on Zacks

Analog Devices Inc. ADI reported fourth-quarter fiscal 2021 adjusted earnings of $1.73 per share, beating the Zacks Consensus Estimate by 2.4%. The bottom line increased 20% year over year and 0.6%, sequentially.

Revenues of $2.34 billion surpassed the Zacks Consensus Estimate of $2.30 billion. Also, the top line improved 53% year over year and 33% from the third-quarter fiscal 2021 level.

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

- Zacks

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

Revenues by End Markets

Industrial: Analog Devices generated revenues of $1.2 billion (accounting for 50% of total revenues), which grew 45% year over year.

Communications: Revenues from the market were $351.6 million (15% of revenues), increasing 13% year over year.

Automotive: Revenues from the market summed $452.6 million (19% of revenues), up 97% from the year-ago quarter’s level.

Consumer: The market generated revenues of $356.9 million (15% of revenues), reflecting 107% growth on a year-over-year basis.

Operating Details

Adjusted gross margin expanded 90 basis points (bps) on a year-over-year basis to 70.9%.

Adjusted operating expenses were $650.7 million, up 50.8% from the year-ago quarter’s level. As a percentage of revenues, adjusted operating expenses were 27.8%, contracting 50 bps year over year.

Adjusted operating margin expanded 140 bps on a year-over-year basis to 43.1% in the reported quarter.

Balance Sheet & Cash Flow

As of Oct 30, 2021, cash and cash equivalents were $1.98 billion, up from $1.5 billion as of Jul 31, 2021.

Long-term debt was $6.25 billion at the end of the fiscal fourth quarter compared with $3.82 billion at the end of the fiscal third quarter.

Net cash provided by operations was $940.7million in the reported quarter, up from $630.04 million in the prior quarter.

ADI generated $810 million of free cash flow in the fiscal fourth quarter.

Additionally, Analog Devices returned $2.5 billion to its shareholders, of which it made dividend payments of $371 million and repurchased shares worth $2.1 billion in the fiscal fourth quarter.

Guidance

For first-quarter fiscal 2022, ADI expects revenues of $2.60 billion (+/- $100 million). The Zacks Consensus Estimate for the same is pegged at $2.48 billion.

Non-GAAP earnings are expected to be $1.78 (+/- $0.10) per share. The consensus mark for the same is pegged at $1.68 per share.

Analog Devices anticipates non-GAAP operating margins of 43.3% (+/- 70 bps).

Zacks Rank & Stocks to Consider

Currently, Analog Devices carries a Zacks Rank #4 (Sell).

Investors interested in the broader technology sector can consider some better-ranked stocks like Alphabet GOOGL, Advanced Micro Devices AMD and Mimecast MIME. While Alphabet sports a Zacks Rank #1 (Strong Buy), Advanced Micro Devices and Mimecast carry a Zacks Rank #2 (Buy), presently. You can see  the complete list of today’s Zacks #1 Rank stocks here.

Alphabet has gained 66.9% on a year-to-date basis. The long-term earnings growth rate for the stock is currently projected at 25.8%.

Advanced Micro Devices has soared 66.3% on a year-to-date basis. The long-term earnings growth rate is currently projected at 46.2%.

Mimecast has surged 37.8% on a year-to-date basis. The long-term earnings growth rate is currently predicted at 35%.



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