Earnings Preview: Analog Devices

Analog Devices (ADI) is expected to report Q3 earnings after the market close on Tuesday, August 18, with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 20c for EPS and $479.03M for revenue, according to First Call. Guidance provided by management on its last earnings call was for Q3 EPS of 17c-19c and Q3 revenue to be flat vs. Q2 's reported $475M. On May 20, the day after its earnings report, Analog's CEO presented at an industry conference and said he sees "inventory levels probably close to trough levels". That he sees "inventory draw-down greatest in industrial segment." Analog's CEO went on to say that order levels at that time were more stable month to month and customers are not getting rid of inventory as quickly. However, the CEO said at the time that he sees no marked change in momentum.

Analyst Views

Credit Suisse expects Analog Devices to deliver upside to its Q3 revenue estimate and guidance of $475M. The firm notes that Analog Devices' Q3 growth will be more muted than its peers due to its higher exposure to industrials which has remained weak versus other end-markets, and its on a July quarter end. Specifically, Credit Suisse sees Analog Devices delivering revenues closer to $490M, which is up 3% quarter-to-quarter, implying 3c-4c of upside to its 19c estimate. Looking forward: Credit Suisse expects Analog Devices to guide Q4 revenues to roughly seasonal growth, with revenues +3% quarter-to-quarter off of a higher Q3 base to approximately $505M, above the firms current model at $490M and consensus of $497M. Revenue upside would translates to approximately 3c in EPS upside to Credit Suisse's 22c estimates. The consensus is 23c.