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Reflecting On Analog Semiconductors Stocks’ Q3 Earnings: Analog Devices (NASDAQ:ADI)


Kayode Omotosho /
2022/01/25 6:13 am EST
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Heading into the Q4 earnings season, let’s have a look at how the analog semiconductors stocks have fared in Q3, starting with Analog Devices (NASDAQ:ADI).

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. The biggest secular growth drivers currently are the adoption of electric vehicles, 5G networks and Internet of Things connectivity, and demand for chips that reduce power consumption. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 7 analog semiconductors stocks we track reported a solid Q3; on average, revenues beat analyst consensus estimates by 1.65%, while on average next quarter revenue guidance was 2.68% above consensus. Tech stocks have been under pressure since the end of last year, and many of the high-flying software stocks are down 30%+ but analog semiconductors stocks held their ground better than others, with share price down only 3.17% since earnings, on average.

Analog Devices (NASDAQ:ADI)

Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ:ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.

Analog Devices reported revenues of $2.33 billion, up 53.2% year on year, beating analyst expectations by 1.33%. It was a strong quarter for the company, with a significant improvement in inventory levels and an exceptional revenue growth.

“ADI delivered another quarter of record revenue and profits, marking a strong end to the fiscal year. Our Industrial and Automotive markets reached all-time highs and our Consumer business returned to solid growth in fiscal 2021,” said Vincent Roche, President and CEO, “As we enter fiscal 2022, our backlog and bookings remain robust, and we continue to invest in capacity, setting us up for continued growth in the years ahead.”

Analog Devices Total Revenue

Analog Devices pulled off the fastest revenue growth of the whole group. The stock is down 13.8% since the results and currently trades at $160.07.

We think Analog Devices is a good business, but is it a buy today? Read our full report here, it's free.

Best Q3: ON Semiconductor (NASDAQ:ON)

Spun out of Motorola in 1999, ON Semiconductor (NASDAQ: ON) is a global provider of analog chips with specialization in autos, industrial applications, and power management in cloud data centers.

ON Semiconductor reported revenues of $1.74 billion, up 32.2% year on year, beating analyst expectations by 1.7%. It was a very strong quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analyst estimates.

ON Semiconductor Total Revenue

The stock is up 13.5% since the results and currently trades at $54.67.

Is now the time to buy ON Semiconductor? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Texas Instruments (NASDAQ:TXN)

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Texas Instruments reported revenues of $4.64 billion, up 21.6% year on year, missing analyst expectations by 0.58%. It was a weaker quarter for the company, with an underwhelming revenue guidance for the next quarter and a miss of the top line analyst estimates.

Texas Instruments had the weakest performance against analyst estimates in the group. The stock is down 10.5% since the results and currently trades at $176.19. The company is reporting Q4 earnings today, after the bell.

Read our full analysis of Texas Instruments's results here.

NXP Semiconductors (NASDAQ:NXPI)

Spun off from Dutch electronics giant Philips in 2006, NXP Semiconductors (NASDAQ: NXPI) is a designer and manufacturer of chips used in autos, industrial manufacturing, mobile devices, and communications infrastructure.

NXP Semiconductors reported revenues of $2.86 billion, up 26.2% year on year, in line with analyst expectations. It was a very strong quarter for the company, with a significant improvement in gross margin and revenue guidance for the next quarter above analyst estimates.

The stock is down 2.96% since the results and currently trades at $199.39.

Read our full, actionable report on NXP Semiconductors here, it's free.

Skyworks Solutions (NASDAQ:SWKS)

Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.

Skyworks Solutions reported revenues of $1.31 billion, up 37% year on year, beating analyst expectations by 1%. It was a solid quarter for the company, with a significant improvement in inventory levels.

The stock is down 16.5% since the results and currently trades at $142.93.

Read our full, actionable report on Skyworks Solutions here, it's free.

The author has no position in any of the stocks mentioned