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Analog Devices, Inc. (Nasdaq: ADI) reported its financial results for the fiscal second quarter of 2024, which ended on May 4, 2024, showcasing a robust performance despite challenging macroeconomic conditions.

The company reported revenue of $2.16 billion, exceeding its outlook’s midpoint. This performance highlights the resilience of Analog Devices’ business model, even amidst ongoing inventory headwinds. The operating cash flow for the quarter was a significant $4.3 billion, with free cash flow reaching $3.1 billion on a trailing twelve-month basis.

Analog Devices also returned over $675 million to shareholders through dividends and stock repurchases during the second quarter. Vincent Roche, CEO and Chair of Analog Devices, emphasized the company’s ability to achieve profitability and earnings per share above the high end of their outlook.

Roche noted that the stabilization of inventory rationalization across their broad customer base and improving new orders positions the company well for sequential growth in the upcoming quarters.
 

Analog Devices Beats EPS and Revenue Expectations with $1.40 Adj. EPS and $2.16 Billion in Revenue for Fiscal Q2

When comparing the actual performance to market expectations, Analog Devices surpassed revenue predictions but fell short on earnings per share (EPS). The market had anticipated an EPS of $1.26 and revenue of $2.1 billion. However, Analog Devices reported an EPS of $0.61, significantly lower than expected, while revenue came in at $2.16 billion, slightly above expectations.

Despite the lower-than-expected EPS, the company’s adjusted EPS was reported at $1.40, which is above the market expectation, indicating strong underlying performance when excluding certain one-time costs and adjustments.

The gross margin for the quarter was 54.7%, down from 65.7% in the same quarter last year, reflecting the challenging operating environment. Adjusted gross margin stood at 66.7%, down from 73.7% year-over-year. These figures underscore the operational efficiencies and cost management strategies that Analog Devices has implemented to mitigate external pressures.
 

Analog Devices Expects Fiscal 2024 Revenue to Be Between $2.17 Billion and $2.27 Billion

Analog Devices provided optimistic guidance for the third quarter of fiscal 2024. The company forecasts revenue to be around $2.27 billion, plus or minus $100 million.

At the midpoint of this revenue outlook, the company expects a reported operating margin of approximately 20.1%, with an adjusted operating margin of around 40.0%. This guidance reflects the company’s confidence in its ability to drive growth and profitability in the coming months.

Analog Devices also projected reported EPS to be $0.71, plus or minus $0.10, and adjusted EPS to be $1.50, plus or minus $0.10. This outlook is based on current expectations and takes into account the ongoing economic uncertainties and inventory dynamics.

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