Maxwell Tech Beats, Still In Red - Analyst Blog

Energy storage and power delivery products maker, Maxwell Technologies Inc. (MXWL) reported second quarter 2010 adjusted loss of a penny per share, above the Zacks Consensus Estimate for a loss of 2 cents and the year-ago quarterly loss per share of 7 cents. On a reported basis the company had a per share loss of 10 cents compared to a loss of 22 cents in the year-ago quarter.

The 9-cent variance in the reported period between the reported and adjusted earnings came from the impact of a potential settlement with the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) (13 cents), and amortization of intangible assets (1 cent), partially offset by gain on embedded derivative and warrants (5 cents).

Operational Performance

Maxwell Technologies’ revenue was $29.6 million in second quarter 2010, up 19% from $24.8 million in the year-ago quarter, beating the Zacks Consensus Estimate of $29 million. Ultracapacitor revenue was $15.9 million, up 48% from $10.7 million in second quarter of 2009. Revenue from high voltage capacitor and microelectronics products was $13.7 million, down 2% from $14 million in the year-ago quarter.

In second quarter 2010, Maxwell had a gross margin of 40%, versus 36% in the year-ago quarter. Operating profit was $0.9 million compared to a loss of $0.8 million in the year-ago quarter. In second quarter 2010, net profit was $0.5 million as compared to a net loss of $1.2 million in second quarter 2009.

Financial Condition

Maxwell Technologies’ reported cash and cash equivalents of $28.2 million compared to $29.6 million at fiscal-end 2009. Long-term debt decreased to $6.3 million in the reported quarter from $11.5 million at fiscal-end 2009.

Outlook

Maxwell Technologies expects ultracapacitor sales to grow 5% - 10% sequentially in third quarter 2010. However, the company expects that combined revenues from high voltage and microelectronics products will be down slightly compared with second quarter 2010 partly due to the three-week summer shutdown of its Swiss operations.

We presently retain a short-term Zacks #4 Rank (Sell) and a longer-term Neutral recommendation on the stock.
 
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