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Analog Devices (ADI) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

Analog Devices, Inc. ADI is slated to report first-quarter fiscal 2020 results on Feb 19, before the opening bell. In the last reported quarter, it delivered a negative earnings surprise of 1.7%.

The company topped the Zacks Consensus Estimate in three out of the trailing four quarters, recording an average of 2.5%.

Trend in Estimate Revision

For the fiscal first quarter, the Zacks Consensus Estimate for earnings has remained stable at $1.00 per share over the past 30 days. This indicates a decline of 24.8% from the year-ago reported figure.

Notably, the consensus mark for revenues is pegged at $1.30 billion, implying a decline of 15.6% from the year-ago reported figure.

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Let’s see how things have shaped up for this announcement.

Analog Devices, Inc. Price and EPS Surprise

 

Analog Devices, Inc. Price and EPS Surprise
Analog Devices, Inc. Price and EPS Surprise

Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote

Factors to Note

Analog Devices has been benefiting from strength in industrial, automotive, consumer and communications markets, along with increased focus on innovation and operational execution.

The automotive electronics market is likely to have gained from consumer demand for added technology and features in new vehicles, along with the transition to hybrid and electric vehicles. The Zacks Consensus Estimate for automotive revenues is pegged at $205 million.

The communications market is anticipated to have performed well in the quarter to be reported, driven by strength in the wireless segment. The accelerated build out of TD-LTE in China, continuing 5G network densification activities in the United States and deployments in Europe benefited the communications segment. The Zacks Consensus Estimate for communications is pegged at $256 million.

However, softness in the consumer market might have been a major concern. Also, macroeconomic headwinds and geopolitical uncertainty are likely to have remained overhangs during the quarter. Further, rising competitive pressure from Maxim and Texas Instruments may reflect on its upcoming results.

For the fiscal fourth quarter, the Zacks Consensus Estimate for revenues from industrial and consumer is pegged at $662 million and $174 million, respectively.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Analog Devices this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Analog Devices has a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Broadcom Inc. AVGO has an Earnings ESP of +1.72% and a Zacks Rank of 2.

Square Inc. SQ has an Earnings ESP of +3.59% and a Zacks Rank #3.

Applied Optoelectronics, Inc. AAOI has an Earnings ESP of +8.12% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Analog Devices, Inc. (ADI) : Free Stock Analysis Report
 
Broadcom Inc. (AVGO) : Free Stock Analysis Report
 
Applied Optoelectronics, Inc. (AAOI) : Free Stock Analysis Report
 
Square, Inc. (SQ) : Free Stock Analysis Report
 
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