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Maxim (MXIM) Earnings & Revenues Surpass Estimates in Q3

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Maxim Integrated Products, Inc. MXIM reported third-quarter fiscal 2021 adjusted earnings of 82 cents per share, which beat the Zacks Consensus Estimate by 9.3%. The figure increased 34.4% year over year and 12.3% on a sequential basis.

Revenues of $665.03 million outpaced the Zacks Consensus Estimate of $641 million. Also, the top line increased 18% year over year and 6% on a sequential basis.

Top-line growth was primarily driven by the company’s strong performance across the automotive and industrial markets.

Notably, Analog Devices announced plans to acquire Maxim last year. In the latest quarterly release, Maxim stated that it is proceeding well toward the deal closure.

End-Market in Detail

Industrial: The company generated 33% of total revenues from the market in the reported quarter. Revenues in the market advanced 28% from the prior-year quarter.

Automotive: The market accounted for 30% of fiscal third-quarter revenues. Revenues from the market were up 30% on a year-over-year basis.

Consumer: Maxim generated 20% revenues from the market. Revenues in the market were up 24% year over year.

Communications and Data Center: Revenues from the market, which now includes computing, accounted for 16% of the total revenues. Revenues from the market declined 13% from the year-ago quarter.

Maxim Integrated Products, Inc. Price, Consensus and EPS Surprise

Maxim Integrated Products, Inc. Price, Consensus and EPS Surprise
Maxim Integrated Products, Inc. Price, Consensus and EPS Surprise

Maxim Integrated Products, Inc. price-consensus-eps-surprise-chart | Maxim Integrated Products, Inc. Quote

Operating Details

Non-GAAP gross margin was 67.4%, which expanded 130 basis points (bps) from the year-ago quarter.

Non-GAAP operating expenses were $185.8 million, which increased 2.8% year over year.

Operating margin was 37.2%, which expanded460 bps from the year-ago quarter.

Balance Sheet & Cash Flow

As of Mar 27, 2021, cash, cash equivalents and short-term investments were $2.03 billion, up from $1.8 billion as of Dec 26, 2020.

Long-term debt was $995.1 million at the fiscal third-quarter end compared with $994.7 million at the second-quarter end.

For the quarter under review, cash flow from operations was $271 million, up from $210 million in the prior quarter. Further, the company utilized $16 million for capital expenditure in the fiscal third quarter.

Zacks Rank & Stocks to Consider

Currently, Maxim carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are KLA Corporation KLAC, AMETEK, Inc. AME and Vishay Intertechnology, Inc. VSH. All three companies currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rates of KLA, AMETEK and Vishay are pegged at 14.03%, 8.78% and 20.26%, respectively.

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You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.

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