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Shares of Analog Devices (NASDAQ:ADI) increased over 7.5% on Wednesday following the company’s Q2 financial report and projections, which exceeded Wall Street’s anticipations.
In the quarter ending May 4, Analog posted an adjusted earnings per share of $1.40, which was higher than the $1.27 per share predicted. Though revenue fell by 33.7% YoY to $2.16B, it surpassed the $2.11B forecast. CEO Vincent Roche stated that customer inventories seem to be stabilizing.
“We are witnessing a stabilization in our extensive customer base’s inventory rationalization, paving the way for sequential growth in Q3,” said Roche. “With incoming orders improving, we are hopeful about the commencement of a cyclical recovery.”
For Q3, Analog Devices anticipates revenue around $2.27B, plus or minus $100M, which is above the $2.17B prediction. Operating margins are projected to be 20.1%, plus or minus 200 basis points, while the adjusted operating margin is expected to be around 40%, plus or minus 100 basis points.
The company predicts adjusted earnings to be around $1.50 per share, plus or minus $0.10, higher than the $1.36 per share forecast.
Following the announcement, shares of competitor Texas Instruments (TXN) were up in premarket trading, while ON Semiconductor (ON) and NXP Semiconductors (NXPI) remained mostly unchanged.
A conference call is scheduled by Analog at 10 a.m. EST to discuss the results.
