Analog Devices Inc
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Information Technology : Semiconductors & Semiconductor Equipment | Large Cap Blend
Company profile

Analog Devices, Inc. (Analog Devices) designs, manufactures and markets a portfolio of solutions that leverage high-performance analog, mixed-signal and digital signal processing technology, including integrated circuits (ICs), algorithms, software and subsystems. Its products include Analog Products, Converters, Amplifiers/Radio Frequency, Other Analog, Power Management and Reference, and Digital Signal Processing Products. The Company is a supplier of data converter products. The Company is a supplier of high-performance amplifiers. Its analog product line also includes products of high performance radio frequency (RF) ICs. The Company's DSPs are used for high-speed numeric calculations. The Company offers its products for applications in various end markets, such as industrial, automotive, consumer and communications. The Company operates in the United States, Rest of North/South America, Europe, Japan and China.

Postmarket

Last Trade
Delayed
$156.38
2.09 (1.35%)
Bid
--
Ask
--
B/A Size
--

Market Hours

Closing Price
$154.29
Day's Change
-4.30 (-2.71%)
Bid close
--
Ask close
--
B/A Size
--
Day's High
159.41
Day's Low
154.03
Volume
(Below Average)
Volume:
3,016,479

10-day average volume:
3,526,468
3,016,479

UPDATE: Expect another quarter of big earnings beats, as Wall Street estimates were likely overly depressed

8:39 am ET January 18, 2021 (MarketWatch)
Print

Tomi Kilgore

Earnings have fallen from a year ago the past three quarters, but results from early reporters suggest that streak could be snapped

Can you really say something is a lot better than expected, if you're not exactly sure what you were expecting?

The U.S. earnings reporting season kicked off Friday, with the first reports from big banks, including Dow Jones Industrial Average component J.P. Morgan Chase & Co. (JPM)

Early indications suggest another quarter in which aggregate S&P 500 earnings per share are set to beat expectations by a wider-than-usual margin. The beats could be big enough, that EPS growth could swing to positive for the first time since before the COVID-19 pandemic took hold.

Don't miss: The COVID-19 earnings recession is expected to remain, but an end may be in sight (https://www.marketwatch.com/story/the-covid-19-earnings-recession-is-expected-to-remain-but-an-end-may-be-in-sight-11610829902).

Also read: Banks are back -- almost half of 15 large U.S. banks are expected to increase quarterly profit (https://www.marketwatch.com/story/banks-are-back-almost-half-of-15-large-u-s-banks-are-expected-to-increase-quarterly-profit-11610395992).

The blended EPS growth estimate for the S&P 500, which includes some results already reported and the average estimates of analysts of coming results, is negative 6.9% through Monday, according to FactSet data. Although only 5.2% of the S&P 500 companies have reported, that's already a sharp improvement from the 12.9% decline estimated at the start of the fourth quarter.

The reason for the narrowing of the loss forecast is two-fold. First, the companies that have already released results were beating expectations in the early going by a relatively large 13% on average, according to UBS equity strategist Keith Parker.

Second, FactSet Senior Earnings Analyst John Butters said in a recent research note that the EPS growth estimate has been increasing during the quarter, which is contrary to the historical norm of analysts lowering estimates during a quarter.

During the past five years, the average is for EPS growth estimates to fall by 4.5% during a quarter, Butters said. He suggested that one reason estimates have been increasing could be that analysts made "substantial cuts" to their fourth-quarter estimate during the second and third quarters.

The big estimate cuts are likely a result of analysts assuming the worst as COVID-19 raged. With companies forced to operate largely in the dark during the pandemic, amid a disjointed U.S. government response, they were unable to provide much, if any guidance, for analysts to have confidence in their projections.

"Wall Street expectations are too low for Q4 2020, so we should see plenty of beats," said Nicholas Colas, co-founder of DataTrek Research. "We need them."

As an example of how far off analyst estimates have been during the pandemic, first-quarter EPS growth ended up as negative 12.9%, after starting the quarter at positive 4.7%; second-quarter growth was negative 31.2%, compared with an estimate of negative 11.0% at the start of the quarter; while third-quarter growth improved to negative 5.6% from an early estimate of negative 24.5%.

UBS's Parker said he expects "Q4 earnings to be big," with results coming in more than 10% above estimates. That might be enough to end the pandemic-induced earnings recession, and mark the first quarter of earnings growth since the fourth-quarter of 2019.

J.P. Morgan Chase reported Friday fourth-quarter earnings per share that beat expectations (https://www.marketwatch.com/story/jp-morgan-chases-stock-rises-into-record-territory-after-reporting-record-121-billion-profit-2021-01-15), but the stock reversed an early gain to fall 2.3% in morning trading. And Well Fargo & Co. Inc. (WFC)beat EPS estimates for the first time in six quarters (https://www.marketwatch.com/story/jp-morgan-chases-stock-rises-into-record-territory-after-reporting-record-121-billion-profit-2021-01-15), but the stock tumbled 7.8% to pace the S&P 500 index's decliners.

There is a concern, however, that the recent surge in new cases resulting from COVID-19, which have led to some renewed lockdown measures, may short-circuit the earnings recovery.. Read the Coronavirus Update column (https://www.marketwatch.com/search?q=&m=Column&rpp=15&mp=Coronavirus+Update&bd=false&rs=true).

Delta Air Lines Inc. (DAL) reported Thursday a wider-than-expected fourth-quarter loss (https://www.marketwatch.com/story/delta-airs-stock-gains-after-revenue-beats-expectations-but-losses-were-wider-than-forecast-2021-01-14), with travel demand softening as the quarter progressed as a surge in COVID-19 cases prompted calls from health officials to not travel during the Thanksgiving and Christmas holidays. Also Thursday, Alaska Air Group Inc. (ALK) reported fourth-quarter load factor that was below forecasts (https://www.marketwatch.com/story/alaska-air-load-factor-falls-below-q4-expectations-and-is-expected-to-fall-further-this-month-2021-01-14), as revenue passengers declined in November and December from a post-pandemic peak in October.

Time will tell, if this late-quarter softness seen by some airlines will translate to other sectors.

-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com

	

(END) Dow Jones Newswires

January 18, 2021 08:39 ET (13:39 GMT)

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