Analog Devices Results Boosted by Higher Demand for Automotive Chips

Investopedia
2024-11-26

Key Takeaways

  • Analog Devices beat profit and sales estimates as demand for chips picked up in its fiscal fourth quarter.
  • The company got a boost from sales of semiconductors used in the automotive sector.
  • CFO Richard Puccio said Analog Devices continues to face "macroeconomic uncertainty."

Shares of Analog Devices (ADI) advanced Tuesday as the semiconductor maker posted better-than-anticipated results on a pickup in demand for automotive chips.

The company reported fiscal fourth-quarter adjusted earnings per share (EPS) of $1.67, above the $1.64 expected by analysts surveyed by Visible Alpha. Revenue slid 10% year-over-year to $2.44 billion, but that was also more than estimates.

Automotive 'Orders Picked Up Steadily' in Q4, CFO Says

Chief Financial Officer (CFO) Richard Puccio explained that following a brief drop in overall bookings in the third quarter, "orders picked up steadily throughout the fourth quarter, particularly in the Automotive end market." 

Chief Executive Officer (CEO) Vincent Roche said that "unprecedented customer inventory headwinds drove a historic revenue decline during fiscal 2024," but Puccio added that while "macro uncertainty continues to limit the pace of our recovery," the company remains "cautiously optimistic for a strong growth year in fiscal 2025." 

Analog Devices sees first-quarter 2025 adjusted EPS of $1.53, plus or minus $0.10, slightly below forecasts. It predicts revenue of $2.35 billion, plus or minus $100 million, in line with expectations. 

Analog Devices shares, which rose 3% Tuesday morning, have added about 16% of their value this year.

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