Analog Devices Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Analog Devices (NASDAQ:ADI) will unveil its latest earnings on Tuesday, November 27, 2012. Analog Devices designs, manufactures, and markets analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications.

Analog Devices Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 57 cents per share, a decline of 5% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 58 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 57 cents during the last month. Analysts are projecting profit to rise by 21.7% versus last year to $2.13.

Past Earnings Performance: The company fell in line with estimates last quarter after topping forecasts the quarter before. After coming in above the mean estimate by 2 cents in the second quarter, the company fell in line with expectations by reporting profit of 56 cents per share last quarter.

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A Look Back: In the third quarter, profit fell 22.8% to $169.8 million (56 cents a share) from $219.9 million (71 cents a share) the year earlier, meeting analyst expectations. Revenue fell 9.9% to $683 million from $757.9 million.

Wall St. Revenue Expectations: Analysts are projecting a decline of 2.6% in revenue from the year-earlier quarter to $697.7 million.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 8.97 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 7% in the fourth quarter of the last fiscal year, 11% in first quarter and 14.6% in the second quarter and then fell again in the third quarter.

The company is trying to stem some negative momentum heading into this earnings announcement. Profit has dropped by a year-over-year average of 27.8% over the past four quarters.

Analyst Ratings: With 11 analysts rating the stock as a buy, none rating it as a sell and 11 rating it as a hold, there are indications of a bullish outlook.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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