Analog Devices Profit Tops Estimates

(RTTNews) - Analog Devices Inc (ADI) on Tuesday reported an increase in third-quarter profit, driven by higher revenue and margins, with results topping Wall Street estimates.

The chip maker provided a strong outlook for the fourth quarter, sending its shares up 6.5 percent in after-hours trade on the Nasdaq.

"Our focus on sustainable innovation that bridges the physical and digital worlds across diverse applications and markets, coupled with strong execution throughout the company, delivered solid growth and profits," said CEO Vincent Roche in a statement.

Analog Devices, based in Norwood, Massachusetts, reported quarterly net earnings of $216.5 million or $0.68 per share, compared with $180.6 million or $0.57 per share last year.

Excluding items, adjusted earnings for the quarter were $0.77 per share, compared with $0.63 per share a year ago. On average, 24 analysts polled by Thomson Reuters estimated earnings of $0.74 per share for the quarter. Analysts' estimates typically exclude special items.

Analog Devices' revenues for the third quarter increased to $863.4 million from $727.8 million in the prior-year quarter. Twenty-five analysts had a consensus revenue estimate of $845.4 million for the quarter.

Among segments, Industrial revenue increased 10 percent from a year ago, Consumer segment surged 155 percent, while Communications segment fell 14 percent and Automotive was flat, the company said.

Gross margin for the quarter improved to 65.9 percent from 65.4 percent last year, while operating margin climbed to 30.7 percent from 27.8 percent.

For the fourth quarter, the company expects adjusted earnings of $0.79 to $0.87 per share on revenues of $880 million to $940 million. Analysts currently expect earnings of $0.79 per share on revenues of $879.3 million.

Analog Devices expects fourth-quarter gross margin of about 65.5 percent.

The company announced a cash dividend of $0.40 per share.

ADI closed Tuesday at $57.90, down $1.60 or 2.69%, on a volume of 4.4 million shares. In after hours, the stock gained $3.79 or 6.55% at $61.69.