Why MaxLinear, Inc. Stock Popped Today

By Markets Fool.com

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

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What:Shares of MaxLinear were up 14.2% as of noon Tuesday after the company revised its financial guidance for the remainder of the year.

So what: For the current quarter -- which includes May and June contributions from its now-complete $287 million acquisition Entropic Communications -- MaxLinear now expects revenue between $68 million and $72 million, which should translate to adjusted net income of $12 million, or roughly $0.22 per diluted share.Analysts, on average, were anticipating adjusted earnings of $0.11 per share on revenue of $54.1 million.

For the second half of the year, MaxLinear anticipates revenue between $175 million and $185 million, with adjusted net income of $36 million, or roughly $0.58 per diluted share. Based on MaxLinear's fiscal Q1 results, and analysts' expectations for full-year revenue and earnings of $255.8 million and $0.52 per share, respectively, Wall Street was only expecting MaxLinear to achieve second-half revenue of $166.3 million, and earnings of $0.32 per share.

Now what:MaxLinear CEO Kishore Seendripu noted the company is already seeing the benefits of the strategic and tactical goals for the acquisition, and elaborated, "We are seeing strong follow-through of demand across the range of our expanded technology and market-leading broadband data and video product portfolio. This demand is being primarily driven by tier-one operators across the globe, who continue to invest in higher-bandwidth and richer multimedia content delivery platforms."

Additional details on the specific operating expenses related to the acquisition will be provided when MaxLinear officially releases its second-quarter results. But for now, with shares already trading at a reasonable 16 times next year's expected earnings and considering the combined companies are performing significantly better than expected, it's no surprise the market is bidding shares of MaxLinear up today.

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The article Why MaxLinear, Inc. Stock Popped Today originally appeared on Fool.com.

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