Lukewarm Quarter For Maxwell Tech

Energy storage and power delivery products maker, Maxwell Technologies Inc. (MXWL - Analyst Report) reported second quarter 2011 adjusted earnings of 4 cents per share, beating the Zacks Consensus Estimate of a penny. Results also beat the year-ago quarterly loss per share of a penny.

On a reported basis the company reported a loss of 4 cents in the reported quarter versus a loss of 10 cents in the year-ago quarter.

Operational Performance

Maxwell Technologies’ revenue was $38.46 million in the second quarter 2011, up 30% from $29.58 million in the year-ago quarter, beating the Zacks Consensus Estimate of $37 million. Ultracapacitor revenue was $24.4 million, up 54% year-over-year. Revenue from high voltage capacitor and microelectronics products was $14.0 million, up 2% from the year-ago quarter. In the reported quarter gross margin was 40% flat with the year-ago period.

Operating expenses totaled approximately $17.1 million, or 44% of revenue, compared with $15.2 million, or 51% of revenue in the year-ago quarter. Operating loss for the reported quarter was $1.6 million compared with an operating loss of $3.3 million in the year-ago period. Net loss was $1.2 million compared with a net loss of $2.6 million in the year-ago quarter.

Financial Condition

Maxwell Technologies’ reported cash and cash equivalents of $29.8 million compared to $33.1 million at fiscal-end 2010. Long-term debt decreased to $2.50 million in the reported quarter from $12.61 million at fiscal-end 2010.

Outlook

Maxwell Technologies is a leading manufacturer of ultracapacitors, high-voltage capacitors and microelectronics products. Looking ahead, the strong demand trend will continue for the company’s products related to the utility infrastructure, renewable energy, public transportation, and space programs. Also its key end-markets appear likely to benefit from government stimulus programs as well as more stringent automotive emissions legislation.

Maxwell Technologies expects sequential top-line growth in the range of 5%–7% in the third quarter of 2011. For full-year 2011 the company reaffirmed its expectation of year-over-year top-line growth exceeding 20%.

We presently retain a short-term Zacks #4 Rank (Sell) and a longer-term Neutral recommendation on the stock. In the near term we would advise investors to focus on its Zacks #1 Rank (short-term Strong Buy rating) peers like Kyocera Corporation (KYO - Snapshot Report) and ZAGG Incorporated (ZAGG - Snapshot Report).

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