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Maxim (MXIM) to Report Q4 Earnings: What's in the Cards?

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Maxim Integrated Products, Inc. is set to report fourth-quarter fiscal 2017 results on Jul 20.

Last quarter, the company delivered a positive earnings surprise of 7.69%, with an average beat of 4.72%.

However, as far as share price movement is concerned, in the last one year, the stock has loss of 56.9% compared with the Zacks Semi-Analog & Mixed industry’s gain of 15.2%.

Factors to Consider

Maxim Integrated is an original equipment manufacturer (OEM) of semiconductor analog and mixed signal integrated circuits (ICs). The company has a wide range of products that allows it to serve a diverse clientele. Maxim’s product lines are primarily sold in consumer, computing, industrial, automotive and communications markets. Also, its products are extensively used in consumer goods like cordless phones, digital cameras and PDAs, data processing, industrial products, instrumentation products, medical instruments, and various communications gear and networking equipment. 

Also, Maxim reorganized its business structure to distribute R&D, and sales and marketing resources more efficiently between business units, speed up decision-making, improve interaction and collaboration between business units, and quickly process customer feedback for implementation.

However, the concentration of Maxim’s mobility revenues at Samsung is a big concern, which is likely to impact its net revenues. 

For the fiscal fourth quarter, Maxim expects revenues in the range of $590–$630 million based on a quarter-end backlog of $382 million. Gross margin is expected in the range of 65–67% (excluding special items). Earnings per share are expected within 59–65 cents on an adjusted basis.

Earnings Whispers?

Our proven model does not conclusively show that Maxim will beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Maxim has an Earnings ESP of 0.00%. Both the Most Accurate estimate and the Zacks Consensus Estimate stand at 62 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Maxim’s Zacks Rank #3 increases the predictive power of ESP. However, we also need to have a positive ESP to be confident of an earnings surprise.

We caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is witnessing negative estimate revisions.

Stocks to Consider

Here are a few companies, which you may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter.

United Continental Holdings, Inc. (UAL - Free Report) , with an Earnings ESP of +9.72% and Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Comerica Incorporated (CMA - Free Report) , with an Earnings ESP of +4.67% and a Zacks Rank #2.

TD Ameritrade Holding Corporation (AMTD - Free Report) with an Earnings ESP of +2.44% and a Zacks Rank #2.

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