Chipmaker Analog Devices on Wednesday edged above Wall Street's targets for its fiscal first quarter, but it guided well below views for the current period. Still, ADI stock rose after the report.
The Wilmington, Mass.-based company earned an adjusted $1.73 a share on sales of $2.51 billion in the quarter ended Feb. 3. Analysts polled by FactSet had expected earnings of $1.71 a share on sales of $2.5 billion. On a year-over-year basis, Analog Devices earnings dropped 37% while sales decreased 23%.
Analog Devices' fiscal Q1 report marked its third straight quarter of declining sales and earnings as it navigates a cyclical downturn in demand.
For the current quarter, Analog Devices predicted adjusted earnings of $1.26 a share on sales of $2.1 billion. Analysts had been looking for earnings of $1.56 a share on sales of $2.36 billion in the fiscal second quarter. In the year-earlier period, Analog Devices earned an adjusted $2.83 a share on sales of $3.26 billion.
ADI Stock Rises On Predicted Market Recovery
On the stock market today, ADI stock rose 2.3% to close at 193.72.
Heading into the earnings report, ADI stock had formed a flat base with a buy point of 202.77, according to IBD MarketSmith charts.
"ADI delivered first-quarter revenue and profitability above the midpoint of our outlook, despite the continued difficult macroeconomic environment," Chief Executive Vincent Roche said in a news release.
He added, "Consistent with our prior view, we expect customer inventory rationalization to largely subside in our second quarter, and thus enter the second half in a more favorable business backdrop."
Analog Devices makes radio frequency, power management and sensor semiconductors. Its chips are used in industrial, communications, automotive and consumer markets.
In fiscal Q1, Analog Devices said its automotive chip sales grew 9% to $739 million and accounted for 29% of total revenue. However, industrial chip sales fell 31% to $1.2 billion in the period. Sales of chips for communications and consumer devices also fell.
In other news, Analog Devices increased its quarterly dividend by 7% to 92 cents a share.
Analog Devices ranks 10th out of 32 stocks in IBD's semiconductor manufacturing industry group, according to IBD Stock Checkup. ADI stock has a middling IBD Composite Rating of 55 out of 99.
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