Analog Devices Stock Gains 5% on Q2 Beat

Analog Devices (NASDAQ:ADI) saw its shares rise by more than 5% in pre-market today following better-than-expected Q2 results and guidance.

For Q2, the company reported earnings per share (EPS) of $1.40, exceeding the Street estimate of $1.26. Revenue was $2.16 billion, above the consensus forecast of $2.1 billion.

The adjusted gross margin for the quarter was 66.7%, slightly below the projected 67.1%, while the adjusted operating margin was 39%, surpassing the expected 37.7%.

Looking ahead to Q3/24, Analog Devices projects EPS between $1.40 and $1.60, significantly higher than the Street expectation of $1.35. Revenue is anticipated to be between $2.17 billion and $2.37 billion, compared to the consensus of $2.16 billion.

CEO and Chairman Vincent Roche noted that despite ongoing macroeconomic and inventory challenges, the company delivered second-quarter revenue above the midpoint of its outlook. He attributed the strong performance to a resilient business model and disciplined cost control, which resulted in higher-than-expected profitability and EPS.

Roche also expressed optimism about the future, citing stabilizing inventory rationalization and improving new orders as indicators of a potential cyclical recovery starting in the third quarter.