Will Analog Devices (ADI) Beat Earnings Expectations This Afternoon?

NEW YORK (TheStreet) -- Analog Devices (ADI) is scheduled to release its 2015 second quarter earnings results after the market close this afternoon, and analysts are expecting the mixed-signal and digital signal processing integrated circuits maker to post a year-over-year rise in earnings and revenue for the quarter ended April 2015.

Analog Devices has been forecast to report earnings of 72 cents per share on revenue of $820.37 million for the second quarter.

For the 2014 second quarter Analog Devices said it earned 59 cents per diluted share on revenue of $695 million.

Shares of Analog Devices are up by 0.90% to $63.93 in early afternoon trading on Tuesday.

Separately, TheStreet Ratings team rates ANALOG DEVICES as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ANALOG DEVICES (ADI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, increase in net income and good cash flow from operations. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 0.0%. Since the same quarter one year prior, revenues rose by 22.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ADI's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.18, which clearly demonstrates the ability to cover short-term cash needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Semiconductors & Semiconductor Equipment industry average. The net income increased by 17.1% when compared to the same quarter one year prior, going from $152.59 million to $178.76 million.
  • Net operating cash flow has slightly increased to $168.65 million or 7.09% when compared to the same quarter last year. Despite an increase in cash flow, ANALOG DEVICES's average is still marginally south of the industry average growth rate of 14.84%.
  • You can view the full analysis from the report here: ADI Ratings Report

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