Maxim Meets Q2 Expectations, Expects Return to Growth in Q3 2020

January 29, 2020 by Paul Shepard

Maxim Integrated Products, Inc. reported net revenue of $551 million for its second quarter of fiscal 2020 ended December 28, 2019, a 3% increase from the $533 million revenue recorded in the prior quarter, and a 4% decrease from the same quarter of last year.

"Our December quarter results met our expectations, while also maintaining lean inventory levels," said Tunc Doluca, President and Chief Executive Officer. "Looking forward to the March quarter, we expect a return to revenue growth for the company from the same quarter last year, driven by growth in Communications and Data Center, Industrial and Automotive markets."

Fiscal Year 2020 Second Quarter Results

Based on Generally Accepted Accounting Principles (GAAP), diluted earnings per share in the December quarter was $0.53. The results were affected by $5 million in pre-tax special items which primarily consisted of charges related to acquisitions. GAAP earnings per share, excluding special items was $0.56.

Cash Flow Items

At the end of the second quarter of fiscal 2020, total cash, cash equivalents and short-term investments were $1.8 billion, down $10 million from the prior quarter.

Notable items included:

  • Cash flow from operations: $237 million
  • Capital expenditures: $14 million
  • Dividends paid: $130 million ($0.48 per share)
  • Stock repurchases: $108 million
  • Trailing twelve months free cash flow was $737 million. 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 March 2020 quarter was $456 million. Based on the beginning backlog and expected turns, our results for the March 2020 quarter are forecasted to be as follows:

  • Revenue: $555 to $595 million
  • Gross Margin: 65% to 67% GAAP (65.5% to 67.5% excluding special items)
  • EPS: $0.56 to $0.64 GAAP ($0.57 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.