For the current quarter, the chipmaker expects to earn an adjusted $1.72 a share on sales of $1.78 billion

Chipmaker Analog Devices (ADI) on Wednesday beat Wall Street’s targets for its fiscal third quarter, fuelled by record sales of automotive and industrial semiconductors. It also guided higher for the current period. However, ADI stock fluctuated on the news.

The company earned an adjusted $1.72 a share on sales of $1.76 billion in its fiscal third quarter ended July 31. Analysts expected earnings of $1.62 a share on sales of $1.71 billion, according to FactSet. ADI earnings increased 26% while sales rose 21% on a year-over-year (YOY) basis.

However, the company’s sales and earnings growth slowed following four consecutive quarters of accelerating growth.

For the current quarter, ADI expects to earn an adjusted $1.72 a share on sales of $1.78 billion. That’s based on the midpoint of its outlook. Wall Street had predicted adjusted earnings of $1.71 a share on sales of $1.76 billion. ADI’s guidance would translate to year-over-year growth of 19% in earnings and 16% in sales.

ADI stock declined 3% in morning trading on the stock market today before rebounding. ADI stock turned positive at a time in afternoon trading. But it closed the regular session 0.3% lower at 165.78.

The economic recovery continues to take shape with demand still far exceeding supply, underscoring the importance of semiconductors across all industries, Chief Executive Vincent Roche said in a news release.

He added, robust bookings across all end markets, combined with lean inventories and ongoing capacity additions will enable us to close this year on a high note and continue to grow into fiscal 2022.

Truist Securities analyst William Stein reiterated his buy rating on ADI stock after the beat-and-raise report. He maintained his price target of 179.