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Analog Devices Guides For Above-Consensus Fourth Quarter Amid Robust Chip Demand

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Analog Devices Guides For Above-Consensus Fourth Quarter Amid Robust Chip Demand

Analog Devices (ADI) on Wednesday projected above-consensus profit and sales for its fiscal fourth quarter, as robust data center and industrial demand for chips drove its third-quarter results above Wall Street estimates.

For the ongoing quarter, the semiconductor company guided adjusted earnings per share of $3.71 to $4.01 on revenue of $4.2 billion to $4.4 billion. Analysts in a FactSet poll are looking for non-GAAP EPS of $3.54 and sales of $4.08 billion.

For the quarter ended Aug. 1, adjusted EPS rose to $3.45 from $2.05 a year earlier, exceeding the consensus of $3.34. Revenue surged 40% to $4.02 billion, while analysts expected $3.92 billion.

"Demand for our solutions continues to grow, supported by robust (artificial intelligence) and defense spending, cyclical momentum and underlying secular content growth across our diversified end markets," Chief Executive Vincent Roche said on an earnings conference call, according to a FactSet transcript.

Shares of Analog Devices gained 1.2% intraday. The stock has advanced 40% so far this year.

Other chipmaking giants have recently reported strong quarterly results that reflected strong demand. Intel (INTC) reported a 25% year-over-year revenue gain for its second quarter, while Advanced Micro Devices (AMD) posted a 50% surge in quarterly sales.

In a July 13 note, KeyBanc Capital Markets said "analog (was) tracking better than expected, sustaining the early upcycle momentum with data center and industrial demand driving extended lead times, broad-based price increases, and improving bookings."

Analog chips are electronic components used for processing continuous signals.

"Supply remains increasingly tight as AI-related demand competes for non-AI analog capacity, driving continued price increases," KeyBanc said.

For the just-concluded quarter, Analog Devices' industrial division delivered a 53% annual sales jump, while communications soared 84%. Revenue in the automotive and consumer segments also logged gains.

"Demand continued to strengthen across our product portfolio and regions throughout the third quarter, which is reflected in our record fourth quarter outlook," Chief Financial Officer Richard Puccio said in a statement. "We believe our balance of disciplined execution and targeted growth investments will enable us to finish the year strongly and carry that momentum into fiscal 2027."

Price: $374.32, Change: $-2.31, Percent Change: -0.61%

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