Integrated circuits maker Maxim Integrated Products Inc. (MXIM), Thursday reported a profit for the second quarter of fiscal year 2010 from a loss last year, reflecting higher revenues, better margins, as well as lower operating expenses. Both earnings and revenues came in ahead of Street estimates. Looking ahead, the company also provided revenue guidance for the third quarter.
The Sunnyvale, California-based company's net income for the second quarter was $58.63 million or $0.19 per share, compared to a loss of $38.78 million or $0.12 per share in the previous year. Results include $13.8 million additional tax provision due to international restructuring and $3.0 million pre-tax expense primarily for severance due to international restructuring and for ongoing stock option litigation.
Special expense items reduced earnings by $0.05 per share in the quarter.
On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.
Net revenue for the second quarter was $473.51 million, up 5% from $410.67 million in the previous year quarter. Twenty-one Street analysts expected revenues of $459.44 million for the quarter.
In the preceding first quarter, net income dropped to $41.95 million or $0.13 per share from $67.57 million or $0.21 per share in the prior-year quarter, hit by one-time charges and a write down on assets to be sold, notwithstanding a 14% rise in revenues from last year. Net revenue rose 14% to $449.25 million from $394.47 million last year.
For the quarter under review, cost of goods sold declined to $181.73 million from $211.59 million a year ago. Gross profit was $291.79 million, compared to $199.08 million last year. Gross margin for the quarter was 61.6%.
Operating expenses declined to $182.66 million from $279.92 million last year. Research and development expenses were $118.37 million, down from $144.28 million a year ago. Severance and restructuring expenses declined to $2.06 million from $13.59 million a year ago. Other operating expenses declined to $0.92 million from $10.25 million in the previous year.
The company noted that its bookings increased 12% sequentially and 90-day backlog increased 16% to $335 million.
Looking forward, the company expects third quarter revenues in the range of $500 - $520 million with gross margin ranging from 60% - 61%. Operating expenses are expected to range from $180 - $183 million.
Analysts currently expect the company to report earnings of $0.17 per share on revenues of $448.77 million for the third quarter.
The company also declared a quarterly cash dividend of $0.20 per share, payable on March 5, 2010, to stockholders of record on February 19, 2010.
Tunc Doluca, president and chief executive officer, commented, "Revenue grew for the third consecutive quarter. Higher utilization of our factories, a more favorable product mix and lower inventory reserves increased gross margins to our target range. The Company made significant improvements in a challenging 2009. We shortened time to market, qualified a new platform process technology, expanded our customer reach, reduced inventory, upgraded our ERP system, and paid cash dividends of $0.80 to our shareholders.
Among peers, Santa Clara, California-base chip maker National Semiconductor Corp. (NSM), on December 10 reported a second-quarter profit that rose 30% from last year, when results were weighed down by a hefty restructuring charge. Net income for the second quarter was $47.0 million or $0.20 per share, compared to $36.3 million or $0.16 per share in the year-ago quarter. Net sales for the second quarter fell 18% to $344.6 million from $421.6 million in the same quarter last year.
MXIM closed Thursday's regular trading at $18.12, down 0.28 or 1.52%, on a volume of 7.77 million shares on the Nasdaq. In the past 52-week period, the stock traded in a range from $11.01 to $21.00, on a 3-month average volume of 3.57 million shares.
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