ADI Stock: Analog Devices Tops Targets But Warns Of Slowing Sales
Chipmaker Analog Devices (ADI) on Wednesday beat Wall Street's targets for its fiscal second quarter but its forecast for the current quarter missed views. ADI stock fell after the report.
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The Wilmington, Mass.-based company earned an adjusted $2.83 a share on sales of $3.26 billion in the quarter ended April 29. Analysts polled by FactSet had expected earnings of $2.75 a share on sales of $3.21 billion. On a year-over-year basis, Analog Devices earnings rose 18% while sales advanced 10%.
Record sales of industrial and automotive chips drove its fiscal second-quarter beat, the company said in a news release.
For the current quarter, Analog Devices predicted adjusted earnings of $2.52 a share on sales of $3.1 billion. That's based on the midpoint of its outlook. Wall Street had been looking for earnings of $2.65 a share on sales of $3.16 billion in the fiscal third quarter. In the same quarter last year, Analog Devices earned an adjusted $2.52 a share on sales of $3.11 billion.
ADI Stock Sinks After Report
On the stock market today, ADI stock dropped 7.8% to close at 173.20. ADI stock has formed a flat base with a buy point of 198.35, according to IBD MarketSmith charts.
"Looking to the second half, we expect revenue to moderate given the continued economic uncertainty and normalizing supply chains," Chief Executive Vincent Roche said in a written statement. "However, I am confident in ADI's ability to navigate short-term business cycles due to the strength and diversity of our franchise, our hybrid manufacturing model, and alignment to secular growth trends."
Analog Devices makes analog and mixed signal, power management, radio frequency and sensor semiconductors. Its chips are used in industrial, communications, automotive and consumer markets.
Analog Devices is on the IBD Tech Leaders list. ADI stock has an IBD Composite Rating of 94 out of 99, according to IBD Stock Checkup.
Photronics Pops Higher
Elsewhere in semiconductor stocks, chip gear maker Photronics (PLAB) delivered a beat-and-raise quarterly report.
The provider of photomask technologies and solutions earned an adjusted 54 cents a share on sales of $229.3 million in its fiscal second quarter ended April 30. On a year-over-year basis, Photronics earnings rose 42% while sales increased 12%.
For the current quarter, Photronics sees adjusted earnings of 51 cents a share, unchanged from a year earlier, on sales of $229 million, up 4%.
Photronics stock jumped 6.7% to close at 18.36 on Wednesday.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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Source: Investor's Business Daily
