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Maxim (MXIM) Q4 Earnings Match Estimates, Revenues Beat

Zacks Equity Research
·3 min read

Maxim Integrated Products, Inc. MXIM reported fourth-quarter fiscal 2020 adjusted earnings of 58 cents per share, in line with the Zacks Consensus Estimate. The bottom line was above the guided range of 43-57 cents per share.

The figure increased 3% year over year but declined 4.9% on a sequential basis.

Revenues of $545.4 million outpaced the Zacks Consensus Estimate by 0.04% and came above management’s guided range of $480-$550 million. However, the top line decreased 2% year over year and 3% on a sequential basis.

On Jul 13, 2020, Analog Devices announced plans to acquire Maxim for more than $17 billion. Reportedly, shareholders of Maxim are likely to get Analog Devices’ shares instead of cash payment.

End Market in Detail

Industrial: The company generated 36% of total revenues from this market during the reported quarter. Revenues in this market advanced 13% from the prior-year quarter, primarily owing to an uptick in test equipment demand.

Automotive: This market accounted for 22% of the company’s fiscal fourth-quarter revenues. Revenues were down 22% on a year-over-year basis.

Consumer: Maxim generated 16% of revenues from this market. Revenues in this market declined 30% year over year.

Communications and Data Center: Revenues from this market, which now includes computing, accounted for 26% of the total revenues. This reflects an improvement of 36% 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 260 basis points (bps) from the year-ago quarter.

Non-GAAP operating expenses of $183.1 million increased 1.6% year over year. Further, as a percentage of revenues, the figure expanded 150 bps from the prior-year quarter.

Operating margin came in at 32.6%, flat with the year-ago quarter.

Balance Sheet & Cash Flow

As of Jun 27, 2020, cash, cash equivalents and short-term investments were $1.6 billion, down from $1.7 billion on Mar 28, 2020.

Long-term debt was $994 million at fiscal fourth quarter-end compared with $993.7 million at fiscal third quarter-end.

During the quarter under review, cash flow from operations was $212 million, up from $209.8 million in the prior quarter. Further, the company utilized $16 million for capital expenditure during the fiscal fourth quarter.

Maxim spent $82 million in repurchasing shares and made a dividend payment of $128 million (48 cents per share).

Zacks Rank & Stocks to Consider

Maxim currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Dropbox DBX, Everbridge EVBG and Analog Devices ADI. While both Dropbox and Everbridge sport a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Both Dropbox and Everbridge are scheduled to report earnings on Aug 6. Analog Devices is set to release quarterly results on Aug 19.

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Maxim Integrated Products, Inc. (MXIM) : Free Stock Analysis Report
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