A month has gone by since the last earnings report for Maxim Integrated Products . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Maxim due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Maxim Q4 Earnings Match Estimates, Revenues Beat
Maxim Integrated Products, Inc. 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.
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).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Maxim has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Maxim has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is Maxim (MXIM) Up 0.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Maxim Integrated Products . Shares have added about 0.6% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Maxim due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Maxim Q4 Earnings Match Estimates, Revenues Beat
Maxim Integrated Products, Inc. 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.
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).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Maxim has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Maxim has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.