Analog Devices rises as Credit Suisse posits whether it's 'largely escaping' chip downturn
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Analog Devices (NASDAQ:ADI) shares rose more than 4% in early trading on Tuesday after it posted fourth-quarter results and guidance that topped expectations, leading Credit Suisse to wonder if the semiconductor company is "largely escaping" the downturn impacting the rest of the industry.



Analyst Chris Caso, who has a neutral rating on Analog Devices (ADI), noted that the report is likely to keep the debate ongoing as to whether analog-focused companies, such as competitor Texas Instruments (TXN), have escaped the downturn or just have not been impacted by it yet. 


"Since we have never seen a cycle in which industrial/analog suppliers have avoided a downturn, weâre assuming the latter," Caso wrote in a note to clients.


For the period ending October 29, Analog Devices (ADI) said it earned an adjusted $2.73 per share on $3.25B in revenue, up 38.8% year-over-year. Analysts were expecting Analog Devices (ADI) to earn $2.59 per share and $3.16B in revenue.


Looking ahead, Caso said the company's first-quarter guidance implied a growth rate of 17% year-over-year, while noting more color is needed on supply and demand going into the next fiscal year.


For the first-quarter, Analog Devices (ADI) said it expects revenue to be between $3.05B and $3.25B, topping estimates of $3.04B. It also expects operating margins to be 33.4%, plus or minus 130 basis points, while adjusted operating margins are forecast to be between 49.3% and 50.7%.


Adjusted earnings per share are expected to be between $2.50 and $2.70 per share, topping estimates of $2.41 per share.


Texas Instruments (TXN) gained fractionally in early trading on Tuesday on back of the results.


Last week, Analog Devices (ADI) and Advanced Micro Devices (AMD) announced they had resolved all ongoing patent litigations on mutually agreed terms.