Maxim Integrated Reports 11% Year-to-Year Growth for Q1 Of Fiscal 2019

October 31, 2018 by Paul Shepard

Maxim Integrated Products, Inc. reported net revenue of $638 million for its first quarter of fiscal 2019 ended September 29, 2018, a 1% increase from the $633 million revenue recorded in the prior quarter, and an 11% increase from the same quarter of last year.

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the September quarter was $0.70. The results were affected by $8 million in pre-tax special items which primarily consisted of charges related to acquisitions. GAAP earnings per share, excluding special items was $0.75.  Gross margin for the quarter was 67.4% GAAP (68.5% excluding special items).

Tunc Doluca, President and Chief Executive Officer, commented, "Our September quarter results were solid. Compared to the same quarter last year, revenue and profitability grew strongly, driven by Automotive, Consumer, Industrial and Data Center.  Looking forward, we are seeing softening business conditions.

“However, we believe our business model enables us to be successful in any environment. Due to our strong free cash flow and positive net cash balance, we plan to return 125 percent of free cash flow to shareholders this fiscal year, by increasing the share buyback. We believe buying our shares is the best use of our cash in the current environment,” Doluca concluded.

At the end of the first quarter of fiscal 2019, total cash, cash equivalents and short-term investments were $2.56 billion, a decrease of $63 million from the prior quarter.

Notable items included:

  • Cash flow from operations: $207 million
  • Capital expenditures: $18 million
  • Dividends paid: $128 million ($0.46 per share)
  • Stock repurchases: $112 million

Adjusted trailing twelve months free cash flow was $915 million, which excludes a one-time tax payment of $178 million in the fourth quarter of fiscal 2018. Free cash flow is a non-GAAP measure and is defined by cash flow from operations less capital expenditures.

Business Outlook

The Company's 90-day backlog at the beginning of the December 2018 quarter was $418 million. Based on the beginning backlog and expected turns, our results for the December 2018 quarter are forecasted to be as follows:

  • Revenue: $570 to $610 million
  • Gross Margin: 65% to 67% GAAP (66% to 68% excluding special items)
  • EPS: $0.55 to $0.61 GAAP ($0.59 to $0.65 excluding special items)

Maxim Integrated's business outlook does not include the potential impact of any special items related to restructuring activity, acquisitions, or other business combinations that may be completed during the quarter.