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Microchip (MCHP) Revises Q2 Guidance Range, Shares Fall
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Microchip Technology Inc. (MCHP - Free Report) recently revised its sales and earnings guidance for the second quarter of fiscal 2017. The company now forecasts non-GAAP net sales to be in the range of 1% to 3% as compared with earlier guidance range of flat to 4% up.
However, the mid-point of the guidance remains unchanged at 2%. Further, non-GAAP earnings are now expected to be in the range of 85 to 89 cents per share, as compared with previous guidance range of 83 to 91 cents per share.
Following the news, shares have declined almost 2.6% over the last three trading sessions. Year-to-date, the stock has delivered returns of 30.3% as compared with S&P 500’s 6.7 %.
The revised guidance reflects the impact of the recent acquisitions of Atmel and Micrel. The company stated that integration of both the businesses is almost on the verge of completion.
Moreover, Microchip now anticipates operating expenses as percentage sales at the Atmel business to decline to 30% compared with 40% at the time of acquisition. This will definitely help the company in reporting improved profitability in the second quarter.
Microcontroller Key Catalyst
Microchip is one of the fastest-growing providers of 16-bit and 32-bit microcontrollers in the world. The microcontroller business of the company continued to outperform the industry and enabled it to gain significant market share.
Moreover, the company is increasingly expanding its touch business beyond handsets and tablets into areas, such as automotive industrial applications. This is further expected to drive top-line growth in the rest of fiscal 2017.
Despite a challenging macroeconomic environment, the company reported relatively healthy first quarter of fiscal 2017 results based on these factors. Non-GAAP earnings were 84 cents per share compared with 69 cents per share in the year-ago quarter. Non-GAAP revenues surged 58.1% to an all-time high of $844 million.
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Microchip (MCHP) Revises Q2 Guidance Range, Shares Fall
Microchip Technology Inc. (MCHP - Free Report) recently revised its sales and earnings guidance for the second quarter of fiscal 2017. The company now forecasts non-GAAP net sales to be in the range of 1% to 3% as compared with earlier guidance range of flat to 4% up.
However, the mid-point of the guidance remains unchanged at 2%. Further, non-GAAP earnings are now expected to be in the range of 85 to 89 cents per share, as compared with previous guidance range of 83 to 91 cents per share.
Following the news, shares have declined almost 2.6% over the last three trading sessions. Year-to-date, the stock has delivered returns of 30.3% as compared with S&P 500’s 6.7 %.
The revised guidance reflects the impact of the recent acquisitions of Atmel and Micrel. The company stated that integration of both the businesses is almost on the verge of completion.
Price and Consensus
Price and Consensus | Quote
Moreover, Microchip now anticipates operating expenses as percentage sales at the Atmel business to decline to 30% compared with 40% at the time of acquisition. This will definitely help the company in reporting improved profitability in the second quarter.
Microcontroller Key Catalyst
Microchip is one of the fastest-growing providers of 16-bit and 32-bit microcontrollers in the world. The microcontroller business of the company continued to outperform the industry and enabled it to gain significant market share.
Moreover, the company is increasingly expanding its touch business beyond handsets and tablets into areas, such as automotive industrial applications. This is further expected to drive top-line growth in the rest of fiscal 2017.
Despite a challenging macroeconomic environment, the company reported relatively healthy first quarter of fiscal 2017 results based on these factors. Non-GAAP earnings were 84 cents per share compared with 69 cents per share in the year-ago quarter. Non-GAAP revenues surged 58.1% to an all-time high of $844 million.
Zacks Rank & Key Picks
Microchip is a Zacks Rank #3 (Hold) stock.
Some better-ranked stocks in the industry include Silicon Laboratories (SLAB - Free Report) , Analog Devices (ADI - Free Report) and Inphi Corp . While both Analog and Silicon sport a Zacks Rank #1 (Strong Buy), Inphi has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Interested in IPOs? Check out the special edition of Zacks Friday Finish Line below, where Editor Maddy Johnson and Content Writer Ryan McQueeney interview Kathleen Smith of Renaissance Capital about the IPO market in 2016 (see part two here).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>