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Maxim (MXIM) Q2 Earnings and Revenues Surpass Estimates

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Maxim Integrated Products, Inc. (MXIM - Free Report) reported second-quarter fiscal 2021 adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The figure increased 30.4% year over year and 1.4% on a sequential basis.

Revenues of $628.3 million outpaced the Zacks Consensus Estimate by 3.7%. Also, the top line increased 14% year over year and 1% on a sequential basis.

Revenues were driven by broad-based strength across most of its end markets, namely Consumer and Automotive and Industrial.

Analog Devices announced plans to acquire Maxim last July. During the quarter, the company stated that it is working well toward the closure of the deal.

End Market in Detail

Industrial: The company generated 33% of total revenues from this market for the reported quarter. Revenues in this market advanced 19% from the prior-year quarter, primarily owing to an uptick in test equipment demand.

Automotive: This market accounted for 30% of fiscal second-quarter revenues. Revenues were up 30% on a year-over-year basis, driven by strength in infotainment, driver assistance and electric vehicle content.

Consumer: Maxim generated 20% revenues from this market. Revenues in this market were up 13% year over year due to strength across smartphones, gaming, wearables, tablets and broad-based personal electronics in Consumer.

Communications and Data Center: Revenues from this market, which now includes computing, accounted for 17% of the total revenues. This reflects a decline of 11% from the year-ago quarter.

Operating Details

Non-GAAP gross margin was 67.4%, which expanded 140 basis points (bps) from the year-ago quarter.

Non-GAAP operating expenses of $190.2 million increased 1.2% year over year. Further, as a percentage of revenues, the figure expanded 370 bps from the prior-year quarter.

Operating margin came in at 34%, up 330 bps from the year-ago quarter.

Balance Sheet & Cash Flow

As of Dec 26, 2020, cash, cash equivalents and short-term investments were $1.8 billion, up $194 million from the fiscal first quarter.

Long-term debt was $994.7 million at fiscal second quarter-end compared with $994.4 million at fiscal first quarter-end.

For the quarter under review, cash flow from operations was $210 million, up from $163 million in the prior quarter. Further, the company utilized $16 million for capital expenditure during the fiscal second quarter.

Zacks Rank & Other Stocks to Consider

Maxim currently has a Zacks Rank #2 (Buy). Other top-ranked stocks in the broader technology sector include Semtech Corporation (SMTC - Free Report) , Sify Technologies Limited (SIFY - Free Report) and Microchip Technology Incorporated (MCHP - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth for Alphabet, Maxim, and Microchip Technology is currently projected at 12.5%, 20% and 14.9%, respectively.

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