Microchip Technology (MCHP - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings of $1.37 per share, which beat the Zacks Consensus Estimate by 2.24% and surged 38.4% on a year-over-year basis.
Net sales of $1.96 billion increased 25.1% year over year and surpassed the Zacks Consensus Estimate by 0.36%.
Quarter in Detail
In terms of product line, microcontroller sales grew 17.8% year over year and 1.6% sequentially to $1.06 billion, accounting for 54.1% of revenues.
Analog net sales of $580 million increased 12.5% sequentially and 34.2% year over year. Analog contributed 29.5% to total revenues.
Other revenues of $320.6 million accounted for 16.3% of revenues.
Geographically, revenues from the Americas, Europe and Asia contributed 25%, 20% and 55% to net sales, respectively.
Non-GAAP gross margin expanded 230 basis points (bps) on a year-over-year basis to 67.1%, primarily benefiting from a favorable product mix.
Non-GAAP research & development expenses, as a percentage of net sales, declined 80 bps year over year to 12.7%. Non-GAAP selling, general & administrative (SG&A) expenses, as a percentage of net sales, declined 70 bps to 8.9%.
Non-GAAP operating expenses, as a percentage of net sales, declined 150 bps year over year to 21.5%.
Consequently, non-GAAP operating margin expanded 380 bps on a year-over-year basis to 45.6%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and short-term investments totaled $379.1 million compared with $319.4 million as of Mar 31, 2022.
As of Jun 30, 2022, its total debt (long-term plus current portion) was $7.56 billion. The company paid down $233.6 million of debt in the reported quarter.
For the fiscal first quarter, cash flow from operating activities was $840.4 million.
Microchip announced a quarterly dividend of 30.1 cents per share, up 9.1% sequentially and 37.8% from the year-ago quarter.
Guidance
Microchip forecasts second-quarter fiscal 2022 net sales in the range of $2.023-$2.101 billion, indicating 5% sequential growth. At the mid-point of this guidance, net sales are expected to grow 25% year over year.
Non-GAAP earnings are anticipated to be $1.44 per share, indicating 34.6% year-over-year growth.
Non-GAAP gross margin is anticipated to be 67.5%.
Non-GAAP operating expenses are projected to be 21.5%.
Non-GAAP operating margin is anticipated to be 46%.
Capital expenditures for the fiscal second quarter are expected between $130 million and $150 million. Capital expenditures for fiscal 2023 are estimated between $500 million and $550 million.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #4 (Sell).
Asure Software (ASUR - Free Report) , Blink Charging (BLNK - Free Report) , and Everbridge (EVBG - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asure shares are down 27.2% year to date. ASUR is set to report second-quarter 2022 results on Aug 8.
Blink shares are up 34.1% year to date. BLNK is set to report second-quarter 2022 results on Aug 8.
Everbridge shares are down 67.9% year to date. EVBG is set to report second-quarter 2022 results on Aug 9.
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Microchip Technology (MCHP - Free Report) reported first-quarter fiscal 2023 non-GAAP earnings of $1.37 per share, which beat the Zacks Consensus Estimate by 2.24% and surged 38.4% on a year-over-year basis.
Net sales of $1.96 billion increased 25.1% year over year and surpassed the Zacks Consensus Estimate by 0.36%.
Quarter in Detail
In terms of product line, microcontroller sales grew 17.8% year over year and 1.6% sequentially to $1.06 billion, accounting for 54.1% of revenues.
Analog net sales of $580 million increased 12.5% sequentially and 34.2% year over year. Analog contributed 29.5% to total revenues.
Other revenues of $320.6 million accounted for 16.3% of revenues.
Geographically, revenues from the Americas, Europe and Asia contributed 25%, 20% and 55% to net sales, respectively.
Non-GAAP gross margin expanded 230 basis points (bps) on a year-over-year basis to 67.1%, primarily benefiting from a favorable product mix.
Non-GAAP research & development expenses, as a percentage of net sales, declined 80 bps year over year to 12.7%. Non-GAAP selling, general & administrative (SG&A) expenses, as a percentage of net sales, declined 70 bps to 8.9%.
Non-GAAP operating expenses, as a percentage of net sales, declined 150 bps year over year to 21.5%.
Consequently, non-GAAP operating margin expanded 380 bps on a year-over-year basis to 45.6%.
Balance Sheet & Cash Flow
As of Jun 30, 2022, cash and short-term investments totaled $379.1 million compared with $319.4 million as of Mar 31, 2022.
As of Jun 30, 2022, its total debt (long-term plus current portion) was $7.56 billion. The company paid down $233.6 million of debt in the reported quarter.
For the fiscal first quarter, cash flow from operating activities was $840.4 million.
Microchip announced a quarterly dividend of 30.1 cents per share, up 9.1% sequentially and 37.8% from the year-ago quarter.
Guidance
Microchip forecasts second-quarter fiscal 2022 net sales in the range of $2.023-$2.101 billion, indicating 5% sequential growth. At the mid-point of this guidance, net sales are expected to grow 25% year over year.
Non-GAAP earnings are anticipated to be $1.44 per share, indicating 34.6% year-over-year growth.
Non-GAAP gross margin is anticipated to be 67.5%.
Non-GAAP operating expenses are projected to be 21.5%.
Non-GAAP operating margin is anticipated to be 46%.
Capital expenditures for the fiscal second quarter are expected between $130 million and $150 million. Capital expenditures for fiscal 2023 are estimated between $500 million and $550 million.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #4 (Sell).
Asure Software (ASUR - Free Report) , Blink Charging (BLNK - Free Report) , and Everbridge (EVBG - Free Report) are some better-ranked stocks that investors can consider in the broader sector. All three stocks have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asure shares are down 27.2% year to date. ASUR is set to report second-quarter 2022 results on Aug 8.
Blink shares are up 34.1% year to date. BLNK is set to report second-quarter 2022 results on Aug 8.
Everbridge shares are down 67.9% year to date. EVBG is set to report second-quarter 2022 results on Aug 9.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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