MaxLinear Misses Q2 Estimates, Lowers Guidance, Cuts Costs

MaxLinear forecast third-quarter revenue well below analysts' expectations, pointing to a broader pullback in orders across its broadband and connectivity markets.

The communications-chip maker posted second-quarter adjusted earnings of $0.12 a share, missing the $0.17 consensus. Revenue of $148 million also fell short of the $155 million analysts had modeled and was down from $162 million in the same period last year.

Chief Executive Kishore Seendripu said customers are cutting inventory levels and taking longer to decide on new projects. "We are seeing longer decision cycles," he said on the earnings call.

For the current quarter, MaxLinear expects revenue of $130 million to $140 million, far below the $158 million analysts were looking for. Gross margin is seen at 58%, down from 62% a year earlier, as factory utilization rates run lower. The company plans to reduce operating expenses by about 10% in the second half to protect profitability.

One area of growth was the data-center segment, where revenue rose 12% from a year earlier on demand for optical chips used in AI networks. That business now makes up about 18% of total sales, up from 14% in the prior quarter.

MaxLinear shares fell in after-hours trading. The stock has lost roughly a third of its value over the past 12 months. The company's MXL stock page shows an Unscored Alpha rating, reflecting analyst uncertainty about the recovery in its core broadband business.