Microchip Technology (NASDAQ:MCHP) Releases Quarterly Earnings Results, Beats Expectations By $0.03 EPS

Microchip Technology (NASDAQ:MCHP) issued its quarterly earnings results on Thursday. The semiconductor company reported $0.97 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.94 by $0.03, FiscalAI reports. The company had revenue of $1.62 billion during the quarter, compared to analyst estimates of $1.61 billion. Microchip Technology had a net margin of 9.34% and a return on equity of 14.97%. Microchip Technology’s quarterly revenue was up 42.2% compared to the same quarter last year. During the same quarter last year, the business posted $0.35 EPS.

Here are the key takeaways from Microchip Technology’s conference call:

• September-quarter sales rose 42.2% year over year to $1.622 billion, and non-GAAP EPS of $0.97 beat the guidance midpoint by $0.04. Results included about $53 million of one-time revenue that the company does not expect to recur in December.
• Bookings remained strong, the book-to-bill ratio was well above one, and backlog entering December was higher than entering September. Management cited broad growth across industrial, aerospace and defense, automotive, and other markets, while warning that supply constraints are delaying some shipments.
• December-quarter revenue guidance is flat to down 3% sequentially at the midpoint, with non-GAAP gross margin expected at 64%–65%, below September’s 66.5%. The company cited the absence of one-time revenue, constrained shipments of high-margin products, lower utilization, and rising supplier costs.
• Data-center sales exceeded $250 million in September, and Microchip said its data-center business is on track for $1 billion in calendar 2026. It reported 24 Gen 6 PCIe switch and retimer design wins, with shipments expected to ramp as more designs enter production next year; management noted volumes could be affected if data-center investment slows.
• Net debt declined despite funding the Hailo acquisition, and leverage was 2.36 times trailing adjusted EBITDA; management expects leverage to keep falling. The company plans to maintain its dividend for now and revisit capital returns as it moves into the next fiscal year.

Microchip Technology Stock Performance

Shares of NASDAQ MCHP traded down $10.49 during midday trading on Thursday, hitting $64.85. The company’s stock had a trading volume of 43,901,145 shares, compared to its average volume of 11,534,264. The stock has a fifty day moving average price of $75.19 and a 200 day moving average price of $79.48. Microchip Technology has a one year low of $48.52 and a one year high of $105.91. The company has a current ratio of 1.92, a quick ratio of 1.11 and a debt-to-equity ratio of 0.83. The firm has a market capitalization of $35.21 billion, a price-to-earnings ratio of 45.94, a P/E/G ratio of 0.52 and a beta of 1.84.

Analyst Ratings Changes

Several brokerages have weighed in on MCHP. Citigroup reduced their price objective on Microchip Technology from $113.00 to $95.00 and set a “buy” rating for the company in a report on Friday, August 7th. Wells Fargo & Company decreased their target price on Microchip Technology from $88.00 to $80.00 and set an “equal weight” rating for the company in a research report on Tuesday, October 20th. TD Cowen lowered their target price on Microchip Technology from $90.00 to $75.00 and set a “hold” rating on the stock in a research note on Monday, October 19th. Weiss Ratings raised Microchip Technology from a “hold (c-)” rating to a “hold (c)” rating in a research report on Tuesday, August 11th. Finally, Zacks Research cut Microchip Technology from a “strong-buy” rating to a “hold” rating in a research report on Monday, August 17th. Three research analysts have rated the stock with a Strong Buy rating, thirteen have issued a Buy rating and eight have assigned a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $97.71.

Insider Activity at Microchip Technology

In related news, CFO James Bjornholt sold 4,112 shares of the firm’s stock in a transaction that occurred on Tuesday, August 25th. The shares were sold at an average price of $75.32, for a total value of $309,715.84. Following the completion of the transaction, the chief financial officer directly owned 28,573 shares of the company’s stock, valued at approximately $2,152,118.36. This trade represents a 12.58% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 1.79% of the company’s stock.

About Microchip Technology

Microchip Technology Incorporated (NASDAQ:MCHP) develops and manufactures semiconductor products used in embedded control and connected electronic systems. Its portfolio includes microcontrollers, microprocessors, analog and power-management devices, memory products, timing and connectivity components, security solutions, and field-programmable gate arrays. The company also provides development tools, software, evaluation kits, and technical support to help customers design and produce electronic equipment.

Microchip’s products are used across a range of markets, including automotive, industrial, aerospace and defense, communications, consumer electronics, data centers, and medical applications.