Microchip Technology (MCHP) Raises Q1 Guidance

Microchip Technology Incorporated (NASDAQ: MCHP) , a leading provider of microcontroller, mixed signal, analog and Flash-IP solutions, today improved the range of its prior guidance for net sales and earnings per share for its fiscal first quarter of 2018 ending June 30, 2017. Microchip previously provided guidance on May 9, 2017 for consolidated net sales to be up 2% to 7%, with a midpoint of 4.5%. Microchip now expects consolidated net sales to be up 4.5% to 6% with a mid-point of up 5.25%. GAAP earnings per share are expected to be between 62 cents and 64 cents, and non-GAAP earnings per share expected to be between $1.22 and $1.26 per share. The original guidance for GAAP earnings per share was between 59 cents and 64 cents and non-GAAP earnings per share was between $1.17 and $1.27 per share.

(Street sees Q1 EPS of $1.22)

“Our business for the first two months of the June 2017 quarter is tracking higher than the midpoint of our original guidance provided on May 9, 2017. Based on the strength of the business we are experiencing, we are increasing the mid-point of our net sales and EPS guidance, as well as narrowing the range of our guidance,” said Steve Sanghi, Microchip’s CEO.

Mr. Sanghi added, “At the mid-point of our new guidance, our net sales in the fiscal first quarter of 2018 are expected to grow 12.6% from our non-GAAP sales of the same quarter of a year ago. Net sales are expected to be up 18.8% from GAAP net sales of the same quarter of a year ago. With such growth driven by our own initiatives as well as strong industry conditions, our inventory internally as well as at distributors is extremely low and lead times are stretching out. While we are adding capacity in numerous areas, we expect that it could take another year for our inventories and lead times to return to more normal levels. As a result, revenue opportunities are moving from one quarter to another and will likely continue to do so for several quarters.”

There will be no conference call associated with this press release. Microchip’s CEO, Steve Sanghi, is presenting at the Stifel 2017 Technology, Internet & Media Conference tomorrow, Tuesday, June 6, 2017 at 8:00 a.m. (Pacific). Microchip’s President and COO, Ganesh Moorthy, is presenting at the Needham & Company Automotive Tech Day on Tuesday, June 6, 2017 at 10:45 a.m. (Eastern). Mr. Sanghi is also presenting at the Bank of America Merrill Lynch 2017 Global Technology Conference on Wednesday, June 7, 2017 at 10:00 a.m. (Pacific). Live webcasts and replay of these presentations will be available at www.microchip.com.

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