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Maxim Integrated Products' (MXIM) CEO Tunc Doluca on Q3 2016 Results - Earnings Call Transcript

Q3 2016 Earnings Conference Call

April 21, 2016 5:00 p.m. ET

Executives

Kathy Ta - Managing Director, IR

Tunc Doluca - President and CEO

Bruce Kiddoo - SVP, CFO

Analysts

John Pitzer - Credit Suisse

Craig Hettenbach - Morgan Stanley

Harlan Sur - JPMorgan

Vivek Arya - Bank of America Merrill Lynch

Ross Seymore - Deutsche Bank

Amit Daryanani - RBC Capital Markets

Ambrish Srivastava - BMO Capital Markets

CJ Muse - Evercore ISI

Chris Danley - Citigroup

Romit Shah - Nomura

Steven Chin - UBS

Craig Ellis - B. Riley & Co.

Mike McConnell - Pacific Crest Securities

Will Stein - SunTrust Robinson Humphrey

Doug Freedman - Sterne Agee

Steve Smigie - Raymond James

Ian Ing - MKM Partners

Cody Acree - Drexel Hamilton

Operator

Good day, ladies and gentlemen, and welcome to the Maxim Integrated Third Quarter of Fiscal 2016 Conference Call.

[Operator Instructions] As a reminder, today's program is being recorded.

I would now like to introduce your host for today's program, Kathy Ta, Managing Director, Investor Relations. Please go ahead, Kathy.

Kathy Ta

Thank you, Jonathan, and welcome everyone to Maxim Integrated's fiscal third quarter 2016 earnings conference call.

With me on the call today are Chief Executive Officer Tunc Doluca and Chief Financial Officer Bruce Kiddoo.

I would like to highlight that we have posted a supplemental financial presentation to our external Investor Relations website. The information in this presentation accompanies the financial disclosures in our earnings press release and on this conference call.

During today's call we will be making some forward-looking statements. In light of the Private Securities Litigation Reform Act, I'd like to remind you that these statements must be considered in conjunction with the cautionary warnings that appear in our SEC filings. Investors are cautioned that all forward-looking statements in this call involve risks and uncertainty and that future events may differ materially from the statements made. For additional information, please refer to the Company's Securities and Exchange Commission filings which are posted on our website.

Now I'll turn the call over to Tunc.

Tunc Doluca

All right. Thank you, Kathy, and good afternoon to everyone on the call. We appreciate your interest in Maxim Integrated and thank you for joining us today.

I would like to start our prepared remarks by highlighting three important takeaways. First, we recorded a strong March quarter as revenue recovered sequentially in our major end-markets. Second, our revenue guidance for the June quarter reflects seasonal growth in automotive and core industrial, growth in consumer from diversification, and a modest increase in communications and datacenter following a strong March quarter.

Third, we executed well on our $180 million cost savings plan. Two milestones were completed during the quarter. We closed the sale of our fab in San Antonio to TowerJazz. The transition of the fab to its new owner is going smoothly. We also completed the divestiture of our energy metering business to Silergy. Bruce will provide more details on our cost savings progress right after me.

Let me now turn to our quarterly results and outlook by major market. First, I will comment on automotive.

Our March quarter automotive business was up strongly and in line with the expectations. Automotive was up from the same quarter of last year by 25%, reflecting content growth and continued strong adoption of new products. In the June quarter we expect automotive to again be strongly up. In fact, we expect June quarter revenue to exceed the $100 million milestone for the first time in Maxim's history. This milestone achievement and continued growth was driven by a broad set of products and customers across multiple geographies.