Key Takeaways
- Analog Devices beat profit and sales estimates as the semiconductor manufacturer sees a “cyclical recovery” ahead.
- The company also posted current-quarter guidance that exceeded forecasts.
- Analog Devices said customer inventories are stabilizing, and new orders are rising.
Analog Devices (ADI) shares soared to a record high Wednesday after the semiconductor maker posted better-than-expected results and guidance as inventory backlogs eased.
The company reported fiscal second-quarter adjusted earnings per share (EPS) of $1.40, beating estimates. Revenue slumped 34% year-over-year to $2.16 billion, but that, too, was above forecasts.
‘Beginning of a Cyclical Recovery’
Chief Executive Officer (CEO) Vincent Roche explained that revenue exceeded the midpoint of its outlook “despite continued macro and inventory headwinds.” However, he pointed out that the company believes that “inventory rationalization across our broad customer base is stabilizing, clearing a path for us to return to sequential growth in the third quarter.” Roche added that the improving inventory picture, along with a rise in new orders, “gives us optimism that we are at the beginning of a cyclical recovery.”
Analog Devices sees current-quarter adjusted EPS of $1.50, plus or minus $0.10, with revenue of $2.27 billion, plus or minus $100 million. Both midpoints were higher than anticipated.
Shares of Analog Devices were up 8% to $233.94 as of 11:08 a.m. ET Wednesday after touching an all-time high $234.67 earlier in the session. They are up about 18% so far in 2024.