Analog Devices, Inc. (NASDAQ:ADI) is gearing up to announce its financial results for the third quarter of fiscal 2023 on August 23.
For the fiscal third quarter, ADI has projected revenues of $3.10 billion, with a potential variance of up to $100 million. The Zacks Consensus Estimate aligns closely at $3.09 billion, signifying a marginal decrease of 0.5% compared to the figures reported a year ago.
In the quarter under review, Analog Devices foresees adjusted earnings per share of $2.52, allowing for a range of plus or minus $0.10. The consensus projection coincides at $2.53 per share, showing a modest increase of 0.4% from the previous year’s reported data.
Recent history reveals that ADI has consistently exceeded expectations in the past four quarters, boasting an average positive surprise of 4.65%.
Key Factors to Take into Account
The third fiscal quarter is anticipated to witness solid performance in Analog Devices, primarily attributed to the strength seen in the industrial and automotive segments.
The growth in Analog Devices’ industrial revenues is expected to be fueled by the thriving momentum of precision signal chains, power franchises, sensing technologies, and wired and wireless connectivity, particularly in the context of factory automation applications.
The company’s prowess in power management and RF portfolios is likely to contribute to growth in instrumentation and test applications, thereby propelling industrial revenues. Projections for industrial revenues stand at $1.66 billion, indicating a commendable growth rate of 6.4% compared to the same period the previous year.
Analog Devices’ involvement in the Battery Management System solution within the electric vehicle domain is anticipated to serve as a positive catalyst, along with the rising popularity of A2B solutions driving performance in the automotive sector. The estimated automotive market revenue is pegged at $738 million, signifying an impressive growth of 12% year-on-year.
Furthermore, the continuous adoption of 5G technology is poised to continue benefitting the company’s standing in the communication end-market. Nonetheless, potential setbacks could arise from ongoing inventory adjustments, which may negatively impact the company’s performance in this sector. The consensus outlook for communication revenues is set at $414 million, indicating a decline of 15.7% compared to the previous year.
In the consumer market, the strength witnessed in home entertainment, hearables, and wearables is expected to bolster ADI’s performance during the period under review. However, the company may face headwinds stemming from inventory corrections within the consumer market. The consensus projection for consumer market communication revenues is $292 million, reflecting a notable decline of 27.9% year-on-year.
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