Maxwell Technologies Inc. (MXWL) reported a weaker-than-expected fourth-quarter 2009 loss per share of 39 cents, below the Zacks Consensus loss per share estimate of 3 cents. In the year-ago period, the company reported a profit of 7 cents per share. The bearish trend was reflected in fiscal 2009 results also where loss per share of 94 cents compared to loss of 71 cents per share in fiscal 2008.
Earnings Revisions Trend
While 8 analysts have been covering the stock, no up and downward movements in estimate revisions for the last 7 and 30 days were noticed. Fiscal 2010 Zacks Consensus EPS estimate is presently at 19 cents per. The consensus is yet to reflect the effects of dismal fiscal 2009 results. The average surprise over the last 4 quarters remained negative at 314.6%. This implies that Maxwell Technologies has fallen short of the Zacks Consensus Estimate by 314.6% on an average over the last 4 quarters.
Maxwell Technologies’ future performance should continue to progress primarily through strong ultracapacitor sales growth and gross margin improvement. Although the company has yet to achieve profitability, it is focused on improving its cost structure by shifting some of its ultracapacitor production to China . Also, the expected boost in ultracapacitor sales through production ramp-up from automotives, coupled with steady demand from wind and heavy transportation, and braking recuperation segments should fuel top-line growth.
In the near-term, however, the rate of future penetration of ultracapacitor technology into broader markets, higher cost structure for ultracapacitor production, and earnings dilutive stock issuances, collectively present downside risk. This justifies our neutral recommendation for the stock (Zacks #3 Rank).
Operational Performance
Maxwell Technologies reported revenue of $28 million in the reported quarter up 22% over the $22.9 million recorded in the year-ago quarter. Of this ultracapacitor revenue increased by 66% to $14.9 million, compared with $9.0 million in the year-ago quarter. Sales of high voltage capacitor and microelectronics products totaled $13.1 million for the reported quarter, down 6% from $14 million in the year-ago quarter.
Operating loss in the reported quarter was $9.7 million compared with a loss of $1.9 million in the year-ago quarter. Net loss in the reported quarter was $10 million, compared with net income of $1.4 million in the year-ago quarter.
In the reported quarter gross margin was 34%, compared with 39% in the year-ago quarter. Gross margin was affected by less favorable revenue mix in the current period and the positive impact of several non-recurring items in the year-ago quarter.
Financial Condition
Cash and restricted cash totaled $37.6 million as of fiscal-end 2009, compared with $38.2 million as of Sep 30, 2009. Long term debt increased to $11.5 billion in the reported quarter from $0.6 million in the year-ago quarter.
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