It wasn’t a good day for tech stock Analog Devices (NASDAQ:ADI). It brought out an earnings report that proved a winner in every regard. Despite this good news, Analog Devices couldn’t keep the beat going, as share prices closed down nearly 8% in Wednesday’s trading.
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The news out of Analog Devices’ earnings report was about as good as anyone could ask for. With earnings per share of $2.83, that was more than enough to beat the analyst projections calling for $2.76 per share. Meanwhile, revenue not only beat projections, but last year’s figures as well. Analog Devices brought in $3.26 billion, beating analysts’ call for $3.21 billion and gaining 9.8% against this time last year.
However, it was Analog Devices’ own guidance that proved the big disappointment. It expected revenue to come in between $3 billion and $3.2 billion. That’s within range of the $3.16 billion analysts were expecting, but it doesn’t leave much room for error. The same thing happened with earnings; Analog Devices expected between $2.42 and $2.62 per share, but analysts looked for $2.65.A small miss, but a miss nonetheless. This was enough to not only hit Analog Devices, but also hurt several other chip sector stocks including Texas Instruments (NASDAQ:TXN) and NXP Semiconductors (NASDAQ:NXPI).
However, analysts are largely unfazed by the news. Seven Buy ratings make Analog Devices a unanimous Strong Buy according to analyst consensus. Further, Analog Devices offers a 33.44% upside potential thanks to its average price target of $231.19.