Analog Devices (ADI) Q1 Earnings & Revenues Beat, Fall Y/Y

Core Insights - Analog Devices Inc. (ADI) reported first-quarter fiscal 2024 adjusted earnings of $1.73 per share, exceeding the Zacks Consensus Estimate by 1.2%, but down 37% year-over-year [1] - Revenues reached $2.51 billion, surpassing the Zacks Consensus Estimate of $2.50 billion, but fell 23% compared to the same quarter last year [1] - The company experienced weakness in communications, consumer, and industrial markets, while automotive markets showed strong momentum [1] Revenue by End Markets - Industrial market revenues were $1.19 billion, accounting for 48% of total revenues, down 31% year-over-year, and missed the Zacks Consensus Estimate of $1.21 billion [2] - Communications market revenues were $302.57 million, representing 12% of revenues, a decrease of 37% from the previous year, and lagged behind the Zacks Consensus Estimate of $319 million [2] - Automotive market revenues totaled $739.16 million, making up 29% of revenues, up 9% year-over-year, and exceeded the Zacks Consensus Estimate of $697 million [2] - Consumer market revenues were $274.14 million, accounting for 11% of revenues, reflecting a 22% decline from the year-ago quarter, but beat the Zacks Consensus Estimate of $268 million [2] Operating Details - Adjusted gross margin contracted by 460 basis points year-over-year to 69% [3] - Adjusted operating expenses were $679.41 million, down 7.3% from the year-ago quarter, representing 27% of revenues, which is an increase of 440 basis points year-over-year [3] - Adjusted operating margin decreased by 910 basis points year-over-year to 42% in the reported quarter [3] Balance Sheet & Cash Flow - As of February 3, 2024, cash and cash equivalents were $1.3 billion, up from $958.1 million as of October 28, 2023 [4] - Long-term debt stood at $5.95 billion at the end of the first quarter, compared to $5.90 billion at the end of the previous quarter [4] - Net cash provided by operations was $1.14 billion in the reported quarter, down from $1.19 billion in the prior fiscal quarter [4] - ADI generated $916 million of free cash flow in the fiscal first quarter and returned $606 million to shareholders, with $426 million in dividends and $180 million in share repurchases [4] Guidance - For the second quarter of fiscal 2024, ADI expects revenues of $2.10 billion (+/- $100 million), below the Zacks Consensus Estimate of $2.40 billion [5] - Non-GAAP earnings are anticipated to be $1.26 (+/- $0.10) per share, compared to the consensus mark of $1.63 per share [5] - The company expects a non-GAAP operating margin of 37% (+/- 100 basis points) [5]