The Gory Details on Analog Devices' Double Fumble

Analog Devices (NYS: ADI) reported earnings on Feb. 22. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Feb. 4 (Q1), Analog Devices missed estimates on revenue and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.

Margins dropped across the board.

Revenue details
Analog Devices tallied revenue of $648.1 million. The 22 analysts polled by S&P Capital IQ wanted to see net sales of $662.3 million on the same basis. GAAP reported sales were 11% lower than the prior-year quarter's $728.5 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.46. The 21 earnings estimates compiled by S&P Capital IQ averaged $0.48 per share. GAAP EPS of $0.46 for Q1 were 36% lower than the prior-year quarter's $0.72 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 63.2%, 300 basis points worse than the prior-year quarter. Operating margin was 28.7%, 690 basis points worse than the prior-year quarter. Net margin was 21.5%, 900 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $666.2 million. On the bottom line, the average EPS estimate is $0.54.

Next year's average estimate for revenue is $2.77 billion. The average EPS estimate is $2.26.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 388 members out of 420 rating the stock outperform, and 32 members rating it underperform. Among 137 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 129 give Analog Devices a green thumbs-up, and eight give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Analog Devices is outperform, with an average price target of $38.60.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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