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Energy storage and power delivery products maker, Maxwell Technologies Inc. (MXWL - Analyst Report) reported third-quarter 2012 adjusted earnings (earnings before non-recurring items, but including stock-based compensation expense) of 19 cents per share, beating the Zacks Consensus Estimate by 11 cents. Results also came above the year-ago quarterly earnings of 9 cents per share.

On a reported basis, the company reported earnings of 19 cents per share in the quarter versus 9 cents in the year-ago quarter.

Operational Performance

Maxwell Technologies’ revenue was $43.9 million in the third quarter of 2012, up 6.8% from $41.1 million in the year-ago quarter. The top line also surpassed the Zacks Consensus Estimate of $45 million. Ultracapacitor revenue was $28.2 million, significantly up 15% year over year. Revenue from high voltage capacitor and microelectronics products was $15.1 million, down 7% from the year-ago quarter.

Total operating expenses during the quarter were $12.4 million, down 18.8% year over year. In the reported quarter, Maxwell Technologies clocked operating income of $6.5 million, up from $2.1 million in the year-ago quarter.

Financial Condition

Maxwell Technologies reported cash and cash equivalents of $20 million compared with $40 million at the end of September 30, 2011. Long-term debt rose to approximately $3 million from $2.3 million at the end of third quarter of 2011.


Wind energy and hybrid transit bus applications continue to be the primary drivers of ultracapacitor sales. Currently, the company is working to resolve the hybrid bus drive system application issues. This would lead to delay in previously forecasted deliveries. As a result of those delays and generally lower demand, the company expects revenue in the fourth quarter of 2012 to be similar to the one recorded in the first quarter of 2012.

However, the company is confident of its current cash and credit resources and believes them to be adequate to allow it to advance its core technologies, develop and launch new products and expand production capacity as needed.


Maxwell Technologies easily surpassed the Zacks Consensus Estimates. The company continues to be the market leader in the budding ultracapacitor market. Though, ultracapacitor sales growth has slowed down due to lower demand in Europe and other places, the company is trying to focus on developing new growth opportunities, improving efficiency and controlling expenses to improve its profits. Future top-line growth should be fueled by the expected increase in ultracapacitor sales through a production ramp-up for automotives, as well as its focus on improving its cost structure and the steady demand from heavy transportation, wind, braking recuperation and automotive programs.

In the near term, downside risks include the rate of penetration for ultracapacitor technology into broader markets, a higher cost structure for ultracapacitor production, research and development overheads and earnings dilutive equity issuances. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Based in San Diego, California Maxwell Technologies, Inc. develops, manufactures and markets energy storage and power delivery products for transportation, industrial telecommunications and other applications and microelectronic products for space and satellite applications. Maxwell Technologies markets and sells its products in North America, Europe, and Asia.

Some of the main competitors are Park Electrochemical Corp. (PKE - Snapshot Report) and CalAmp Corporation (CAMP - Snapshot Report).

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