Earnings and revenues of chipmaker Analog Devices (ADI) climbed to a record high and exceeded forecast in the fourth quarter, aided by a double-digit growth in the industrial and communications segments. The company’s stock gained in the premarket Tuesday following the announcement.
Adjusted earnings climbed to $1.55 per share in the fourth quarter from $1.45 per share in the same period last year, beating estimates. Unadjusted profit was $433 million or $1.15 per share, higher than $347.7 million or $0.93 per share reported a year earlier.
Revenues of the Norwood, Massachusetts-based tech firm moved up 3.6% annually to $1.59 billion, aided by a further strong growth in the demand for its products in the B2B market. Analysts had forecast a slower revenue growth. The industrial and communications sectors witnessed robust growth, adding to the overall sales.
Revenues increased 3.6%, aided by a further strong growth in the demand for the company’s products in the B2B market
“Our portfolio of innovative solutions, customer-centric approach, and disciplined operational execution drove high profitability and strong cash generation, allowing us to return more than $360 million to shareholders in the quarter,” said CEO Vincent Roche.
During the fourth quarter, the management returned about $364 million to shareholders through dividends and share repurchases. Meanwhile, the board of directors declared a cash dividend of $0.48 per share, to be paid on December 10, 2018, to all shareholders of record on November 29, 2018.
Encouraged by the strong results, the company currently forecasts its first-quarter adjusted earnings at $1.28 per share. The guidance for unadjusted earnings and revenues is $0.92 per share and $1.51 billion respectively. While the earnings outlook is below market expectations, the revenue forecast is in line.
In the past twelve months, Analog Devices shares declined about 4%. The stock closed the last trading session sharply lower but gained about 3% in early trading Tuesday.
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