Analog Devices posted fiscal third-quarter revenue of $4.02 billion, up 40% from $2.88 billion a year earlier, as demand strengthened across its portfolio. Gross margin rose to $2.71 billion from $1.79 billion, and gross margin percentage increased to 67.3% from 62.1%, a gain of 520 basis points.
Operating income nearly doubled to $1.61 billion from $818 million, lifting operating margin to 40.1% from 28.4%, an improvement of 1,170 basis points. Diluted earnings per share climbed to $2.74 from $1.04.
On an adjusted basis, gross margin increased to $2.92 billion from $2.00 billion, with adjusted gross margin percentage rising to 72.5% from 69.2%. Adjusted operating income advanced to $2.01 billion from $1.22 billion, and adjusted operating margin widened to 50.0% from 42.2%. Adjusted diluted earnings per share rose to $3.45 from $2.05.
For cash generation, operating cash flow totaled $1.60 billion in the quarter and $5.55 billion over the trailing 12 months. Free cash flow was $1.46 billion for the quarter and $4.94 billion over the trailing 12 months, equal to 36% of revenue. The company returned $1.69 billion to shareholders in the quarter, including $535 million in dividends and $1.16 billion in stock repurchases.
Looking ahead, Analog Devices said it expects fourth-quarter revenue of $4.3 billion, plus or minus $100 million. At the midpoint, it is forecasting reported operating margin of about 42.6% and adjusted operating margin of about 52.0%. It expects reported EPS of $3.14 and adjusted EPS of $3.86. Following these announcements, the company's shares moved -0.14%, and are now trading at a price of $376.105. Check out the company's full 8-K submission here.
