Analog Devices (ADI) Up 0.4% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Analog Devices reported its fourth-quarter fiscal 2024 earnings, with revenues of $2.44 billion, exceeding estimates and aligning with management's guidance. However, the overall performance showed a decline in key markets, particularly industrial and automotive sectors, leading to a significant year-over-year revenue drop for the fiscal year [2][6][19]. Financial Performance - Fourth-quarter revenues of $2.44 billion beat the Zacks Consensus Estimate by 1.5% [2] - Fiscal 2024 total revenues declined 23% year over year to $9.43 billion, surpassing the Zacks Consensus Estimate of $9.39 billion [6] - Non-GAAP earnings for Q4 were $1.67 per share, exceeding estimates by 1.83%, but down 16.9% year over year [14] - Adjusted gross margin contracted 230 basis points to 67.9%, and adjusted operating margin was 41.1%, down 360 basis points [5] Market Segment Performance - Industrial market revenues were $1.07 billion, accounting for 44% of total revenues, down 21% year over year [3] - Automotive market revenues totaled $717 million, representing 29% of revenues, down 2% from the previous year [4] - Communications market revenues were $275.6 million, down 18% year over year [17] - Consumer market revenues grew by 31% year over year to $379.7 million, reflecting strong performance [18] Shareholder Returns and Cash Flow - The company repurchased shares worth $95 million and paid $457 million in dividends during Q4 [8] - For fiscal 2024, Analog Devices returned over $2.4 billion to shareholders, including $616 million in share repurchases and $1.8 billion in dividends [8] - Operating cash flow for Q4 was $1.05 billion, with free cash flow of $855 million; for fiscal 2024, operating cash flow was $3.9 billion and free cash flow was $3.1 billion [21] Future Guidance - For Q1 fiscal 2025, management expects net sales of $2.35 billion (+/- $100 million) and a non-GAAP operating margin of 40% (+/- 100 bps) [9] - Non-GAAP earnings are projected to be $1.53 (+/- 10 cents) per share [9] Market Position and Estimates - The stock has a poor Growth Score of F and a D grade on the value side, placing it in the bottom 40% for investment strategy [11] - Estimates for the stock have trended downward, indicating a Zacks Rank 3 (Hold) [10][23]