Analog Devices, one of the best semiconductor stocks, recently reported its Q32020 earnings on 19th August 2020. Revenues were down 2% year-on-year to $1.46 billion. However, they were up 11% sequentially as compared to the previous quarter. The industrial segment revenue was $774.4 million, up 3% year-on-year. The communications segment revenues came in at $363.6 million, up 14% year-on-year. The auto segment saw revenues drop 29% year-on-year to $162.5 million. Lastly, consumer segment revenues of $155.7 million were down 13% year-on-year.
Gross margins dropped slightly from 70.4% to 69.9% on a year-on-year basis while adjusted diluted earnings per share grew 8% from $1.26 per share to $1.36 per share. The earnings beat analyst estimates of $1.43 billion for revenue and $1.28 for earnings per share. Analog Devices also declared a dividend of $0.62 per share.
Analog Devices CEO, Vincent Roche, said, “We saw continued strength in communications across both wireless and wireline applications. Healthcare saw record demand, and other parts of our industrial portfolio such as instrumentation test also performed well. Unsurprisingly, the main area of weakness was automotive, driven by global factory shutdowns and lower vehicle sales.”
Analog Devices is one of the top semiconductor stocks to buy because it has key initiatives in growth areas. For example, the company has tied up with Intel to help customers scale up their 5G networks. Its new electric vehicle solution that reduces vehicle weight and energy requirements already has 5 major customers. It also has initiatives in industrial automation and space technology. All of these areas are estimated to be high-growth opportunities.
Analog Devices is among the best semiconductor stocks for 2020, having returned 43% since the March market crash. Its stock closed at $118.15 on 19th August 2020, up 0.93% for the past month.