Chipmaker Analog Devices (ADI) on Wednesday beat analyst estimates for its fiscal first quarter and signaled a return to growth starting with the current quarter. Analog Devices stock popped higher on the news.
The Wilmington, Mass.-based company earned an adjusted $1.63 a share on sales of $2.42 billion in the quarter ended Feb. 1. Analysts polled by FactSet had expected earnings of $1.54 a share on sales of $2.36 billion. On a year-over-year basis, Analog Devices earnings fell 6% while sales dropped 4%.
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Analog Devices has now posted seven consecutive quarters of declining sales and earnings as it navigates a cyclical downturn in semiconductor demand in the automotive and industrial sectors. However, the company forecast a return to year-over-year growth in the current quarter.
For its fiscal second quarter, Analog Devices predicted adjusted earnings of $1.68 a share on sales of $2.5 billion. That’s based on the midpoint of its outlook. Analysts were modeling earnings of $1.66 a share on sales of $2.46 billion in fiscal Q2. In the same quarter last year, the chipmaker earned an adjusted $1.40 a share on sales of $2.16 billion.
Late Tuesday, Analog Devices raised its quarterly dividend by 8% to 99 cents a share. It also increased its share repurchase authorization by $10 billion.
“Bookings continued to show gradual improvement during the first quarter with strength in Industrial and Automotive positioning us to grow sequentially and year-over-year in our second fiscal quarter,” Chief Financial Officer Richard Puccio said in a news release. “We remain confident that fiscal 2025 represents a return to growth for ADI.”
Chief Executive Vincent Roche said the company’s recovery is being propelled by “numerous new (contract) wins” as well as “improving cyclical dynamics.”
In morning trades on the stock market today, Analog Devices stock advanced 4.3% to 229.68.
Since it hit a record high of 244.14 last July, ADI stock has been in a downtrend. It has been consolidating for 31 weeks, according to IBD MarketSurge charts.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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