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Why and Maxim Integrated Products, Inc. Are Getting Crushed After Hours

It was a quiet day in the markets as the Dow Jones Industrial Average (DJINDICES: ^DJI  ) barely budged, moving down 2.83 points, or just 0.02%. The S&P 500 (SNPINDEX: ^GSPC  ) closed near record levels, edging up 0.97 points, or a mere 0.05%. However, two tech names -- (NASDAQ: AMZN  ) and Maxim Integrated Products (NASDAQ: MXIM  )  -- are getting crushed in tonight's after-hours session.

Amazon's growth continues, but the bottom line disappoints, which has been a phenomenal growth story over the years, has faced declining profitability in recent years -- driven in no small part by investments across a broad swath of technologies. This quarter was no different, with the online shopping giant reporting sales of $19.34 billion -- up 23.2% year over year -- and Q2 loss per share of $0.27 (wider than the $0.02 per share loss in the year-ago period).

For the current quarter, Amazon is looking for sales of between $19.7 billion and $21.5 billion -- the midpoint of which ($20.6 billion) slightly missed the $20.83 billion consensus. However, where things get downright ugly is that the company is looking for an operating loss of between $410 million and $810 million -- significantly wider than the $25 million loss from a year ago.

More positively, CFO Tom Szkutak noted on the call that Amazon Prime subscribers are "growing very nicely year over year," even in the face of a price hike from $79 to $99 for a subscription. Further, Amazon is apparently continuing to invest heavily in original content, which, if successful, could add to the value proposition of a Prime subscription.

The shares are down over 10% in the after-hours session as of this writing.

Maxim gets slammed
Shares of Maxim Integrated Products are down 11.20% in the after-hours session, as of this writing, following its earnings report. The company reported $642 million in sales (missing consensus by $8.35 million), and earnings per share of $0.43, missing consensus by $0.05. Guidance wasn't much better, with the company looking for sales of $580 million to $620 million, and earnings per share of between $0.34-$0.40, missing consensus of $676.06 million and $0.51, respectively.

Though the company has some exposure to Apple -- with rumors that it may continue to gain share there, to Cirrus Logic's chagrin -- its mobile business has very high exposure to Samsung, which has seen well-publicized weakness in its own mobile sales -- something Maxim has indicated that it plans to address going forward by broadening its mobile customer base.

Finally, the company announced an increase to its quarterly dividend to $0.28 per share, up 8% from the dividend paid in the prior quarter -- though that's a weak consolation prize in light of the substantial share-price drop.

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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Related Tickers

8/27/2015 4:35 PM
^DJI $16654.77 Up +369.26 +2.27%
^GSPC $1987.66 Up +47.15 +2.43%
S&P 500 INDEX CAPS Rating: No stars
AMZN $518.37 Up +17.60 +3.51% CAPS Rating: ***
MXIM $33.39 Up +0.96 +2.96%
Maxim Integrated P… CAPS Rating: ***