Microchip Tech Earnings: Exceeds Estimates

S&P 500 (NYSE:SPY) component Microchip Technology Incorporated (NASDAQ:MCHP) reported its results for the second quarter. Microchip Technology develops and makes specialized semiconductor products used in a variety of embedded control applications.

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Microchip Technology Incorporated Earnings Cheat Sheet

Results: Reported a loss of $21.2 million (11 cents per diluted share) in the quarter. Microchip Technology Incorporated had a net income of $79.3 million or 40 cents per share in the year-earlier quarter.

Revenue: Rose 12.5% to $383.3 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Microchip Technology Incorporated reported adjusted net income of 48 cents per share. By that measure, the company beat the mean estimate of 44 cents per share. It beat the average revenue estimate of $340.8 million.

Quoting Management: “Our September quarter results were slightly lower than what we had guided during our last earnings call and were consistent with the preliminary results we announced on October 15th,” said Steve Sanghi, President and CEO. “The macro environment continued to be very weak during the quarter. The negative effects of the European markets and weaker economic activity in the U.S. and China led us to finish the quarter slightly lower than we expected.”

Key Stats:

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the second quarter of the last fiscal year, which saw a 10.9% decrease.

After three consecutive quarters of profits, the company declared a loss in the latest quarter. The company reported a profit of $78.7 million in the first quarter, a profit of $80.6 million in the fourth quarter of the last fiscal year and $77.5 million in the third of the last fiscal year.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 43 cents versus a mean estimate of net income of 44 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 49 cents a share to 45 cents over the last thirty days. The average estimate for the fiscal year is $1.78 per share, falling from $1.90 thirty days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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