Analog Devices To Buy Back Up To $2.5 Bln Of Stock; Cuts Q4 Profit Outlook

Analog Devices Inc. (ADI) said it will repurchase up to $2.5 billion of the company’s common stock. The company cut its fourth-quarter profit outlook, but raised its quarterly revenue outlook.

The company noted that it entered into multiple accelerated share repurchase agreements to repurchase up to $2.5 billion of the company’s common stock.

The accelerated share repurchase agreements will be completed under the company’s current share repurchase authorization, which has approximately $10 billion in authorization remaining.

As per the terms of the accelerated share repurchase agreements, the company will receive initial deliveries of approximately 12.2 million shares on September 9, 2021, representing approximately 80% percent of the expected share repurchases under the ASR agreements, based on the company’s closing price of $163.27 on September 7, 2021.
The company expects that the repurchases will be completed by the second quarter of fiscal 2022.

Looking ahead for the fourth quarter of fiscal 2021, the company now expects earnings per share to be $1.25, plus or minus $0.09, and adjusted earnings per share to be $1.69, plus or minus $0.09. Previously, the company had expected quarterly earnings per share to be $1.33, plus or minus $0.11, and adjusted earnings per share to be $1.72, plus or minus $0.11. Analysts polled by Thomson Reuters expect the company to report earnings of $1.62 per share for the fourth-quarter. Analysts’ estimates typically exclude special items.

Adjusted earnings per share includes $0.44 of adjustments related to the net impact of acquisition related expenses, acquisition related transaction costs and restructuring related expense, net. This excludes acquisition related expenses associated with the Maxim acquisition.

For the fourth quarter of fiscal 2021, the company now projects revenue to be $2.30 billion, plus or minus $70 million. ADI expects Maxim to contribute approximately $520 million of revenue to the updated outlook. Previously, the company projected quarterly revenue of $1.78 billion, plus or minus $70 million. Analysts expected revenue of $1.71 billion for the quarter.

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