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Analog Devices (ADI) Up 0.4% Since Last Earnings Report: Can It Continue?
ADIAnalog Devices(ADI) ZACKS·2024-12-26 17:35

Core Viewpoint - Analog Devices reported its fourth-quarter fiscal 2024 earnings, with revenues of 2.44billion,exceedingestimatesandaligningwithmanagement′sguidance.However,theoverallperformanceshowedadeclineinkeymarkets,particularlyindustrialandautomotivesectors,leadingtoasignificantyear−over−yearrevenuedropforthefiscalyear[2][6][19].FinancialPerformance−Fourth−quarterrevenuesof2.44 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 9.43billion,surpassingtheZacksConsensusEstimateof9.43 billion, surpassing the Zacks Consensus Estimate of 9.39 billion [6] - Non-GAAP earnings for Q4 were 1.67pershare,exceedingestimatesby1.831.67 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 717million,representing29717 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 379.7million,reflectingstrongperformance[18]ShareholderReturnsandCashFlow−Thecompanyrepurchasedsharesworth379.7 million, reflecting strong performance [18] Shareholder Returns and Cash Flow - The company repurchased shares worth 95 million and paid 457millionindividendsduringQ4[8]−Forfiscal2024,AnalogDevicesreturnedover457 million in dividends during Q4 [8] - For fiscal 2024, Analog Devices returned over 2.4 billion to shareholders, including 616millioninsharerepurchasesand616 million in share repurchases and 1.8 billion in dividends [8] - Operating cash flow for Q4 was 1.05billion,withfreecashflowof1.05 billion, with free cash flow of 855 million; for fiscal 2024, operating cash flow was 3.9billionandfreecashflowwas3.9 billion and free cash flow was 3.1 billion [21] Future Guidance - For Q1 fiscal 2025, management expects net sales of 2.35billion(+/−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]