| Analog Devices (ADI) is expected to report Q4 earnings after the market close on Monday, November 23, with a conference call scheduled for 5:00 pm ET. The consensus estimate is 26c for EPS and $523.84M for revenue, according to First Call. Guidance provided by management on its last earnings call was better than consensus estimates, calling for EPS of 24c-26c on revenue of $510M-$530M. Gross margin guidance was 55%. Given results of other analog peers showing their Sept. quarter revenues up about 14% sequentially, Deutsche Bank believes upside to Street estimates for Analog Devices is possible. The firm is modeling EPS of 26c, revenue of $525M, and gross margin in-line with guidance at 55%. Deutsche Banks believes that if revenue upside approaches the growth of Analog Devices' peers they expect the gross margin to outperform guidance as well. Looking ahead: For Q1 Deutsche Bank is modeling 28c on $520M in revenue, slightly below consensus of Street's 28c on $532.53M in revenue. Given macro uncertainties remain high, Deutsche Bank expects Analog Devices to give relatively conservative guidance especially if Q4 upside growth approaches the level delivered by peers. Deutsche's EPS estimates assume a gross margin of 56.4%, up 140bps quarter-on-quarter, driven by improved mix and utilization. Finally, Deutsche is modeling operating expenses of $194M, up 2% q/q, but down 7% year-over-year, illustrating Analog Devices' goal of delivering improved operating leverage. Key focus items for the conference call: commentary on end-demand trends, GM/OM guidance, details on inventory and lead times, and an update on its cost-reducing restructurings. :theflyonthewall.com |
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