Analog Devices (ADI) stock jumps on strong guidance, Q2 results beat

Analog Devices (NASDAQ: ADI) saw its shares jump nearly 5% in premarket trading Wednesday after the company reported better-than-expected Q2 results and guidance.

For the fiscal Q2, the company posted earnings per share (EPS) of $1.40, topping the analyst estimate of $1.26. Revenue came in at $2.16 billion, also above the consensus projection of $2.1 billion.

Analog reported an adjusted gross margin for the quarter of 66.7%, slightly below the estimate of 67.1%, while the adjusted operating margin was 39%, higher than the estimated 37.7%.

For Q3 2024, Analog Devices forecasts EPS between $1.40 and $1.60, considerably higher than the $1.35 expected by analysts.

Revenue is expected to be between $2.17 billion and $2.37 billion, against the consensus estimate of $2.16 billion.

"ADI delivered second-quarter revenue above the midpoint of our outlook, despite continued macro and inventory headwinds. Further, the strength and resiliency of our business model, coupled with disciplined cost control, enabled us to achieve profitability and earnings per share above the high-end of our outlook," said Vincent Roche, CEO and Chairman.

"We believe inventory rationalization across our broad customer base is stabilizing, clearing a path for us to return to sequential growth in the third quarter. This, coupled with improving new orders, gives us optimism that we are at the beginning of a cyclical recovery."

By Vahid Karaahmetovic

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