Analog Devices, Inc. (NASDAQ:ADI) 50% plus rally since March lows has once again been validated by impressive third-quarter financial results. Revenue growth across all B2B markets affirms a company in a phase of robust growth, which continues to support expansion in operating margins.
Strategic Progress
According to the Chief Executive Officer, Vincent Roche, 2020 has been a year of strategic progress depicted by an insatiable demand for the company’s high-performance analog and mixed-signal solutions. The company continues to fire on all angles amid the challenges triggered by the COVID-19 pandemic.
Looking head, Analog Digital Services remains focused on completing the acquisition of Maxim Integrated. The acquisition is poised to present an opportunity to increase scale and scope, highly needed to deliver disruptive innovation for customers.
Likewise, Maxim Integrated should strengthen the Analog Digital Services industry leadership position. For starters, it should diversify its business across markets and applications while also solidifying it as a destination for the world’s best analog talent.
Stellar Q3
The chipmaker is flying high the charts after reporting fourth-quarter financial results that topped estimates. It also guided higher for the current quarter. The Wilmington, Mass-based company returned to sales growth in Q4 after seven straight quarters of declines. The fourth-quarter also marked the second consecutive quarter or earnings growth after six straight down quarters.
Revenue in the fourth quarter topped $1.53 billion against $1.44 billion reported a year ago, with full year revenue coming in at $5.60 billion. B2B revenue increased 4% sequentially and 10% year over year. Analog Digital Services reported quarterly earnings of $1.44 a share against consensus estimates of $1.32 a share.
Analog Digital Services projects earnings of $1.30 a share on sales of $1.5 billion for the current quarter. Analysts expect earnings per share of $1.27 on sales of $1.42 billion.
Operating cash flow totaled $2 billion, backed by free cash flow of $1.8 billion. Analog Digital Services returned $1.1 billion to shareholders in 2020. In an effort to continue returning value to shareholders, Analog Digital Services has approved a quarterly cash dividend of $0.62 a share.