November 2nd, 2006
Maxim Meets Lowered Estimates
Maxim Integrated Products (MXIM) reported earnings that matched expectations following last month’s pre-announcement. The company reported net revenues of $502.7 million for its fiscal first quarter ended September 23, 2006, a 1.5% decrease sequentially.
Although revenue declined, inventories rose 5.1%, in keeping with our thesis that there is too much capacity. Furthermore, property, plant and equipment (a proxy for manufacturing capacity) rose 7.9%, in keeping with our theory that the inventory situation is going to get worse.
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