Maxim’s Q2 Report Tops Estimates
Uri Gruenbaum | Jan 25, 2015 04:40AM ET
Maxim Integrated (NASDAQ:MXIM) released second quarter earnings of fiscal year 2015 on January 22nd. The semiconductor company’s report topped estimates, despite posting a loss per share.
Highlights from the report include net revenue of $567 million, beating analyst estimates of $560.5 million. This net revenue was a 2% sequential decrease and a 9% year-over-year decrease. More than half of the revenue was derived from the consumer and industrial sectors of the company, though the industrial sector posted a sequential decrease due to “normal seasonal trends.”
Maxim posted diluted earnings loss per share of a loss of ($0.25) on a GAAP basis. The company attributed the loss to “pre-tax special items” such as “$138 million in charges related to impairment of goodwill and other assets related to our MEMS business, $28 million in charges related to restructuring activities and $23 million in charges related to acquisitions.”
Looking forward, Maxim forecasts that third fiscal quarter of 2015 will bring revenue of $565 million to $605 million and earnings per share of $0.20 to $0.26 on a GAAP basis. Maxim is expected to be a prominent supplier of chips for the Apple Watch, triggering analysts to adjust estimates for the third quarter.
President and CEO Tunc Doluca commented, “We are pleased with our December quarter revenue performance, driven by our diversification in Consumer and continued strength in our Automotive business. We are on track to achieve our previously announced cost reduction plans, which will enable us to reduce spending while we focus investment in our growth businesses. We also decided to stop investment in Consumer MEMS and Touch technology.” Zack’s estimates that stopping investments in these two sectors with save between $3 million and $4 million in costs, in addition to streamlining costs, increasing profitability, and driving margins.
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