Analog Devices, Inc. (ADI) has reported a 45.15 percent plunge in profit for the quarter ended Apr. 29, 2017. The company has earned $93.56 million, or $0.27 a share in the quarter, compared with $170.57 million, or $0.55 a share for the same period last year. On an adjusted basis, earnings per share were at $1.03 for the quarter compared with $0.64 in the same period last year.
Revenue during the quarter surged 47.41 percent to $1,147.98 million from $778.77 million in the previous year period. Gross margin for the quarter contracted 982 basis points over the previous year period to 55.79 percent. Total expenses were 87.30 percent of quarterly revenues, up from 73.37 percent for the same period last year. That has resulted in a contraction of 1393 basis points in operating margin to 12.70 percent.
Operating income for the quarter was $145.84 million, compared with $207.38 million in the previous year period.
However, the adjusted operating income for the quarter stood at $457.67 million compared to $240.06 million in the prior year period. At the same time, adjusted operating margin improved 904 basis points in the quarter to 39.87 percent from 30.83 percent in the last year period.
"The second quarter of 2017 was a period of significant success," said Vincent Roche, president and chief executive officer. "Business conditions during the quarter were strong, and our results were above the high end of our revised guidance range led by broad-based strength, particularly in the industrial end market. In addition, we closed the acquisition of Linear Technology Corporation and are on track with our integration activities. This acquisition creates a high-performance analog industry powerhouse, and I am confident that we are well on our way to creating tremendous value for our customers, employees, and shareholders."
For the third-quarter 2017, Analog Devices, Inc. expects revenue to be in the range of $1,340 million to $1,420 million. The company expects adjusted revenue to be in the range of $1,370 million to $1,450 million. The company projects diluted earnings per share to be in the range of $0.02 to $0.17. On an adjusted basis, the company projects diluted earnings per share to be in the range of $1.07 to $1.21.
Working capital drops significantly
Analog Devices, Inc. has witnessed a decline in the working capital over the last year. It stood at $2,086.18 million as at Apr. 29, 2017, down 47.10 percent or $1,857.09 million from $3,943.27 million on Apr. 30, 2016. Current ratio was at 1.38 as on Apr. 29, 2017, down from 6.76 on Apr. 30, 2016.
Days sales outstanding went up to 25 days for the quarter compared with 23 days for the same period last year.
Days inventory outstanding has decreased to 58 days for the quarter compared with 68 days for the previous year period.
Debt increases substantially
Analog Devices, Inc. has witnessed an increase in total debt over the last one year. It stood at $12,893.53 million as on Apr. 29, 2017, up 644.72 percent or $11,162.20 million from $1,731.34 million on Apr. 30, 2016. Short-term debt stood at $4,321.17 million as on Apr. 29, 2017. Total debt was 48.43 percent of total assets as on Apr. 29, 2017, compared with 22.87 percent on Apr. 30, 2016. Debt to equity ratio was at 1.29 as on Apr. 29, 2017, up from 0.36 as on Apr. 30, 2016.
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