Analog Devices’ Upcoming Earnings: What to Expect in Q4 Fiscal 2024
Analog Devices (ADI) is preparing to announce its fourth-quarter fiscal 2024 results on November 26.
The company forecasts revenues of $2.4 billion, with a margin of +/- $100 million. The Zacks Consensus Estimate matches this figure, reflecting an 11.6% decline compared to the previous year’s quarter.
For adjusted earnings per share, ADI expects $1.63, also within a range of +/- $0.10. The consensus estimate stands at $1.63 per share, indicating a significant 18.9% drop from the same quarter last year. Notably, this estimate has remained static over the last two months.
In the last four quarters, ADI has exceeded the Zacks Consensus Estimate three times and matched once, achieving an average surprise of 4.4%.
Check out the latest EPS estimates and surprises on the Zacks Earnings Calendar.
Key Factors Influencing ADI’s Performance
ADI’s performance in the fourth quarter is expected to show strong growth in its industrial and consumer sectors. The forecast for industrial revenue is $1.1 billion, which represents a 19.8% decrease from the previous year. In contrast, consumer revenues are expected to total $340.3 million, marking a 16.8% increase from last year.
The company is likely to have benefited from advancements in Energy Transmission and Distribution, as customers upgrade and digitize their electrical grids to meet rising energy demands. This increase is spurred by the growth in electric transportation and the rapid adoption of AI technologies.
Additionally, the Automation sector likely contributed positively in the quarter under review. ADI’s recent partnership with Flagship Pioneering combines its semiconductor expertise with Flagship’s strengths in applied biology, which is anticipated to foster innovation in digitizing biological processes.
Performance Snapshot: Price and EPS Surprise
Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote
However, challenges remain due to ongoing economic issues like persistent inflation and elevated interest rates. Additionally, strained relations between the United States and China may have raised further concerns.
A flat performance in the communications sector is also likely to impact overall revenue. The Zacks Consensus Estimate for communications revenue stands at $270.3 million, suggesting a decline of 25.9% compared to the prior year.
Moreover, the Automotive sector may have faced pressure, with estimates pointing to revenues of $661.7 million, down 10.4% from last year’s figures. Nonetheless, a new collaboration with India’s Tata Group could provide a boost, as ADI looks to explore semiconductor manufacturing in India and integrate its products into Tata’s applications like electric vehicles.
Earnings Outlook According to Zacks Model
According to the Zacks model, there’s a higher probability of an earnings beat when a company has a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold). In ADI’s case, the Earnings ESP is 0.00%, and it currently holds a Zacks Rank of #4 (Sell), indicating that the outlook may not be favorable.
Alternative Stock Picks
For investors looking for better earnings potential this reporting season, consider these stocks that have the characteristics to outperform:
NVIDIA (NVDA) features a positive Earnings ESP of +1.30% and has a Zacks Rank of #1. Its shares rose a remarkable 196.8% year to date, with third-quarter 2024 results expected on November 20. The earnings estimate is set at 75 cents per share, reflecting an 87.5% improvement from the same quarter last year.
Nutanix (NTNX) boasts an Earnings ESP of +1.64% and carries a Zacks Rank of #2. Shares have seen a 43.5% increase this year, and it will report its first-quarter fiscal 2025 results on November 26. The estimated earnings of 31 cents per share suggest a 7% rise from last year.
Hewlett Packard Enterprise (HPE) also has an Earnings ESP of +1.51% and a Zacks Rank of #3. Share prices are up 26.8% year-to-date as the company prepares to release its fourth-quarter results on December 5. The expected earnings of 55 cents per share indicate a 5.8% increase compared to the previous year.
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Analog Devices, Inc. (ADI): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Hewlett Packard Enterprise Company (HPE): Free Stock Analysis Report
Nutanix (NTNX): Free Stock Analysis Report
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The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.
