Strong B2B sales boost Analog Devices Q4 results; stock gains

Earnings and revenues of chipmaker Analog Devices (ADI) climbed to a record high and exceeded forecast in the fourth quarter, aided by a double-digit growth in the industrial and communications segments. The company’s stock gained in the premarket Tuesday following the announcement.

Adjusted earnings climbed to $1.55 per share in the fourth quarter from $1.45 per share in the same period last year, beating estimates. Unadjusted profit was $433 million or $1.15 per share, higher than $347.7 million or $0.93 per share reported a year earlier.

Revenues of the Norwood, Massachusetts-based tech firm moved up 3.6% annually to $1.59 billion, aided by a further strong growth in the demand for its products in the B2B market. Analysts had forecast a slower revenue growth. The industrial and communications sectors witnessed robust growth, adding to the overall sales.

Revenues increased 3.6%, aided by a further strong growth in the demand for the company’s products in the B2B market

“Our portfolio of innovative solutions, customer-centric approach, and disciplined operational execution drove high profitability and strong cash generation, allowing us to return more than $360 million to shareholders in the quarter,” said CEO Vincent Roche.

During the fourth quarter, the management returned about $364 million to shareholders through dividends and share repurchases. Meanwhile, the board of directors declared a cash dividend of $0.48 per share, to be paid on December 10, 2018, to all shareholders of record on November 29, 2018.

Analog Devices stock falls on weak profit forecast

Encouraged by the strong results, the company currently forecasts its first-quarter adjusted earnings at $1.28 per share. The guidance for unadjusted earnings and revenues is $0.92 per share and $1.51 billion respectively. While the earnings outlook is below market expectations, the revenue forecast is in line.

In the past twelve months, Analog Devices shares declined about 4%. The stock closed the last trading session sharply lower but gained about 3% in early trading Tuesday.

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