We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Microchip (MCHP) Revises Q1 Guidance Range, Shares Up
Read MoreHide Full Article
Microchip Technology Inc. (MCHP - Free Report) recently revised sales and earnings guidance for the first quarter of fiscal 2018. The company now forecasts non-GAAP net sales to be in the range of 4.5–6% (mid-point at 5.25%) as compared with earlier guidance range of 2–7% up (mid-point at 4.5%) on a sequential basis.
Microchip now anticipates revenues to increase 12.6% from the year-ago quarter. The revised guidance reflects strong business trend in the first two months (April & May) of the current quarter.
Further, non-GAAP earnings are now expected to be in the range of $1.22–$1.26 per share, as compared with previous guided range of $1.17–$1.27 per share.
However, management didn’t provide any update to gross and operating margin guidance provided on May 9. At that time, gross margin was anticipated to be in the range of 59.5–60%, operating expense as percentage of 23–25% and operating margin 36–37%.
Shares increased almost 1.2% in after hour trading. Year to date, the stock has delivered returns of 31.8% as compared with S&P 500’s 9.4%.
Expanding Portfolio: Key Catalyst
Microchip’s microcontroller business (64.3% of revenues) continues to outperform the industry and has enabled it to gain significant market share. Launch of new innovative products and frequent of updates of existing portfolio are key growth drivers.
We believe that recently launched products like PIC32MZ DA microcontroller (MCU) family and PIC16F19197 family (low power MCUs) will attract new customers. The company has also made available a fully-certified Wi-Fi Software Development Kit (SDK) with Apple (AAPL - Free Report) HomeKit support, which further expands product portfolio.
Meanwhile, Microchip plans to develop and produce a wide range of new linear mixed signal, power interface timing and security products to drive future growth of analog business. The company expects the analog business to generate revenues of $1 billion in the long term.
Moreover, the memory business presents growth opportunities based on the expanding portfolio. We note that the solutions like EERAM will drive growth going forward.
Positive Estimate Revisions
We note that the Zacks Consensus Estimate for the current quarter has increased 12.9% to $1.14 per share in the last 30 days, as most of the analysts revised their estimates upward. The earnings figure currently reflects year-over-year growth of 18.1%.
Fiscal 2017 figure have also jumped 8% to $4.58 in the same period, with most of the analysts revising their estimates upward.
Applied Optoelectronics (AAOI - Free Report) and Ichor Holdings (ICHR - Free Report) are two other top-ranked stocks in the broader sector, as they flaunt the same Zacks Rank as that of Microchip.
Current quarter estimates for Applied Optoelectronics has advanced 13.8% to $1.07 in the last 30 days. Estimate for Ichor has surged 37.2% to 59 cents in the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Microchip (MCHP) Revises Q1 Guidance Range, Shares Up
Microchip Technology Inc. (MCHP - Free Report) recently revised sales and earnings guidance for the first quarter of fiscal 2018. The company now forecasts non-GAAP net sales to be in the range of 4.5–6% (mid-point at 5.25%) as compared with earlier guidance range of 2–7% up (mid-point at 4.5%) on a sequential basis.
Microchip now anticipates revenues to increase 12.6% from the year-ago quarter. The revised guidance reflects strong business trend in the first two months (April & May) of the current quarter.
Further, non-GAAP earnings are now expected to be in the range of $1.22–$1.26 per share, as compared with previous guided range of $1.17–$1.27 per share.
However, management didn’t provide any update to gross and operating margin guidance provided on May 9. At that time, gross margin was anticipated to be in the range of 59.5–60%, operating expense as percentage of 23–25% and operating margin 36–37%.
Microchip Technology Incorporated Revenue (TTM)
Microchip Technology Incorporated Revenue (TTM) | Microchip Technology Incorporated Quote
Shares increased almost 1.2% in after hour trading. Year to date, the stock has delivered returns of 31.8% as compared with S&P 500’s 9.4%.
Expanding Portfolio: Key Catalyst
Microchip’s microcontroller business (64.3% of revenues) continues to outperform the industry and has enabled it to gain significant market share. Launch of new innovative products and frequent of updates of existing portfolio are key growth drivers.
We believe that recently launched products like PIC32MZ DA microcontroller (MCU) family and PIC16F19197 family (low power MCUs) will attract new customers. The company has also made available a fully-certified Wi-Fi Software Development Kit (SDK) with Apple (AAPL - Free Report) HomeKit support, which further expands product portfolio.
Meanwhile, Microchip plans to develop and produce a wide range of new linear mixed signal, power interface timing and security products to drive future growth of analog business. The company expects the analog business to generate revenues of $1 billion in the long term.
Moreover, the memory business presents growth opportunities based on the expanding portfolio. We note that the solutions like EERAM will drive growth going forward.
Positive Estimate Revisions
We note that the Zacks Consensus Estimate for the current quarter has increased 12.9% to $1.14 per share in the last 30 days, as most of the analysts revised their estimates upward. The earnings figure currently reflects year-over-year growth of 18.1%.
Fiscal 2017 figure have also jumped 8% to $4.58 in the same period, with most of the analysts revising their estimates upward.
Zacks Rank & Other Key Picks
Currently, Microchip sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Optoelectronics (AAOI - Free Report) and Ichor Holdings (ICHR - Free Report) are two other top-ranked stocks in the broader sector, as they flaunt the same Zacks Rank as that of Microchip.
Current quarter estimates for Applied Optoelectronics has advanced 13.8% to $1.07 in the last 30 days. Estimate for Ichor has surged 37.2% to 59 cents in the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>