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Analog Devices (NASDAQ: ADI) reported fiscal Q1  2020 earnings narrowly missing top-line expectations but beating analyst expectations on the bottom line.

Sales for the integrated circuit company came in at $1.304 billion falling short of consensus estimates $1.307 billion. The sales for the quarter were 15% lower compared to the same quarter the previous year.

The company’s Communications segment saw the largest sales shrinkage coming in at 31% lower year over year, while the Industrial, Automotive and Consumer segments shrank 7%, 16% and 20% respectively compared to the same the previous year.

Analog Devices reported earnings of $1.03 per share which compared favourably Wall Street expectations on the bottom line of $1.00 per share.

ADI’s first quarter results were in-line with our expectations. Encouragingly, demand across our end markets has stabilized and is beginning to show signs of improvement as we enter our fiscal second quarter. We are building on this momentum by executing on our 2020 priorities – deepening our customer-centricity, deploying our capital efficiently, and capitalizing on secular trends to expand our addressable markets and drive diversified growth.Analog Devices President and CEO, Vincent Roche

The company also provided an outlook for next quarter, their fiscal Q2 2020, indicating that they anticipate revenues between $1.3 billion and $1.4 billion and earnings of between $1.02 and $1.18 per share. Analysts have been expecting sales for next quarter of $1.378 billion and earnings of $1.13 per share, so the company’s guidance is likely to to not have a large impact to the stock as they are within the markets expectations.

The earnings release comes the day after Analog Devices’ board hiked the company’s quarterly dividend by 15% from $0.54 per share to $0.62 per share. This marks the 17th time the company has raised the quarterly dividend in the last 16 years as the company has continued to be able to generate cash to return to shareholders.

Analog Devices stock had a reasonably good year in 2019, returning a healthy 41% to investors. However, the stock has not been as kind to investors this year so far, down 0.2% year to date in a market that has grown nearly 5%. After the earnings release Analog Devices stock was trading up 3.5% in pre-market trading as of the time of publishing.

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Don Weaver

Don has over 15 years of technology, business and start-up experience focusing on software, hardware integration and project management. Don’s research at Grizzle explores the intersection of technology and money. Don holds an MBA from HEC Paris.

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