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Analog Devices, Inc. ADI is set to report first-quarter fiscal 2025 results on Feb. 19.
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Analog Devices expects revenues of $2.35 billion (+/- $100 million). The Zacks Consensus Estimate is pegged at $2.36 billion, indicating a decline of 6.8% from the year-ago quarter’s figure.
ADI anticipates adjusted earnings per share of $1.53 (+/- $0.10). The consensus mark for earnings is pinned at $1.54 per share, indicating an 11% fall from the prior-year quarter’s figure. The estimate has remained unchanged over the past 60 days.
Analog Devices’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.9%.
Analog Devices, Inc. Price and EPS Surprise
Analog Devices, Inc. price-eps-surprise | Analog Devices, Inc. Quote
Factors to Influence ADI’s Q1 Results
Analog Devices’ first-quarter performance is likely to be negatively impacted by broad-based inventory digestion and sluggish demand across key markets. The company expects revenues from Industrial, Automotive and Communications end markets to decline by low-single digits sequentially.
The Industrial segment, ADI’s largest revenue contributor, has been in decline due to prolonged inventory digestion. Also, Industrial customers continue to cut back on capital expenditures amid macro uncertainty. The trend is likely to have continued in the first quarter. Our model estimate for Industrial revenues is currently pegged at $1.02 billion.
Broad-based inventory digestion and production headwinds at original equipment manufacturers are likely to have hurt Automotive end-market sales performance in the first quarter. Shift away from 5G infrastructure spending by telecom operators is expected to have hurt the company’s Communications business segment’s first-quarter revenue performance. Our model estimates for Automotive and Communications end market revenues are pinned at $744.9 million and $273.3 million, respectively.
For the first quarter, Analog Devices expects revenues from the Consumer end market to decline 15% sequentially. While ADI’s consumer segment grew 31% year over year in the last reported quarter, this was driven primarily by a one-time rebound in premium handsets and gaming applications. The broader consumer electronics market remains weak. Our model estimate for the Consumer end-market revenues is pegged at $309.7 million.
Macroeconomic challenges, including the protracted inflationary conditions and still-high interest rates, are likely to have posed challenges for the company in the quarter being reviewed. Escalating tensions between the United States and China have remained major concerns. Additionally, increasing investment in research & development to drive innovation is likely to have weighed on the bottom-line results.