Analog Devices (ADI, Financial), a leader in the global analog chip market, surpassed Wall Street analyst expectations for both profits and revenue in its fourth fiscal quarter. The company's management reported a promising improvement in chip orders, hinting at a potential recovery in demand for electric vehicle and industrial analog chips, which have been sluggish since the Federal Reserve's rate hike cycle began in 2022.
For the fourth quarter ending November 2, ADI reported a GAAP net profit of $478.1 million, or $0.96 per share, exceeding forecasts of $0.84 per share. Excluding one-time items, non-GAAP earnings reached $1.67 per share, ahead of the expected $1.64. Despite a 10% year-over-year revenue decline to $2.44 billion, this figure surpassed both the company's guidance and analyst forecasts of $2.41 billion.
All major end-market applications, including industrial, automotive, communications, and consumer electronics, showed sequential growth, indicating a turning point in analog chip demand. Notably, Q4 sales of consumer electronics analog chips grew by over 30%, reinforcing the recovery trend in PC and smartphone sectors. Following a slight dip in Q3, chip orders rebounded steadily, particularly in the electric vehicle market.
Looking forward, ADI anticipates total revenue for the first quarter of fiscal year 2025 to range between $2.25 billion and $2.45 billion, surpassing the consensus forecast of $2.34 billion. Adjusted earnings per share are expected to be between $1.43 and $1.63, with the upper end of the range outperforming analyst expectations. The company remains optimistic about a growth year in 2025 despite ongoing macroeconomic uncertainties.
Analog Devices' robust Q4 performance and optimistic future outlook, coupled with Citi's "buy" rating and a $265 target price, led to a significant surge in its stock price, reaching $223.58 before market rise. Analog Devices is viewed as an industry benchmark, offering solutions across diverse sectors, including industrial automation and electric vehicle technologies.
