Analog Devices' (ADI) Pre-Announced 1Q Revenue Shortfall Attributed to Weak Customer Demand - Stifel Cuts PT to $64

Stifel maintained a Buy rating on Analog Devices (NASDAQ: ADI), and cut the price target to $64.00 (from $72.00), following the company's preannounced 1Q16 results. Revenue is now expected to be in the range of $745mn-$765mn, as compared with the company’s original guidance of $805mn-$855mn. The revenue shortfall is attributed to weaker-than-forecasted customer demand in the company’s portable consumer business unit, and is said to have begun in the December quarter. The weakness is expected to persist into the company’s July-ending second fiscal quarter.

Analyst Tore Svanberg commented, "Revenue is now expected to be in the range of $745mn-$765mn, as compared with the company’s original guidance of $805mn-$855mn (down 17.7% to down 12.6% q/q). Revised EPS targets are $0.51-$0.55 GAAP and $0.51-$0.55 GAAP ex charges, vs. prior targets of $0.59-$0.67 and $0.65-$0.73, respectively. Gross margin are now anticipated to be ~62% due to higher inventory reserves, vs. 64.3% GAAP and ex charges 64.5%. Operating expenses are guided to be $282mn GAAP (vs. prior $292mn-$297mn) and $264mn ex charges. Tax rate should be approximately 10% GAAP and 13% ex charges. As a result, we now estimate F1Q16 revenue to be $755.0mn and EPS to be $0.49 GAAP and $0.54 non-GAAP."

For an analyst ratings summary and ratings history on Analog Devices click here. For more ratings news on Analog Devices click here.

Shares of Analog Devices closed at $50.50 yesterday.

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