Chipmaker Analog Devices on Wednesday beat estimates for its fiscal third quarter and guided higher than views for the current period. ADI stock jumped on the news.
The Wilmington, Mass.-based company earned an adjusted $2.05 a share on sales of $2.88 billion in the quarter ended Aug. 2. Analysts polled by FactSet had expected Analog Devices to earn $1.95 a share on sales of $2.77 billion. On a year-over-year basis, Analog Devices earnings increased 30% while sales rose 25%.
For its fiscal fourth quarter, Analog Devices predicted adjusted earnings of $2.22 a share on sales of $3 billion. That's based on the midpoint of its outlook. Analysts were modeling earnings of $2.03 a share on sales of $2.83 billion. In the same quarter last year, the chipmaker earned an adjusted $1.67 a share on sales of $2.44 billion.
Analog Devices is benefiting from a cyclical recovery in sales of chips for industrial and automotive markets.
"Despite geopolitical challenges, ADI's third-quarter revenue and earnings per share exceeded the high end of our expectations," Chief Executive Vincent Roche said in a news release. "While tariffs and trade fluctuations are creating market uncertainty, the demand for ADI's products remains robust."
Chief Financial Officer Richard Puccio said the company saw "healthy bookings trends, notably in the industrial end market."
ADI Stock Rises After Q3 Report
On the stock market today, ADI stock advanced 6.3% to close at 244.87.
With the move higher, Analog Devices surged above its 50-day moving average line and topped its Aug. 13 high of 238.27. That offered investors an early entry.
ADI stock has had a rocky tape. Over the past two years, it has broken out of a series of bases but hasn't been able to sustain gains. Most recently, ADI stock has formed a flat base with a buy point of 247.72, according to IBD MarketSurge charts.
With its fiscal Q2 report in May, Analog Devices returned to sales and earnings growth on a year-over-year basis after seven consecutive quarters of declines.
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