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Microchip (MCHP) to Report Q1 Earnings: What's in the Cards?

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Microchip Technology (MCHP - Free Report) is set to release first-quarter fiscal 2022 results on Aug 3.

For the quarter, the company expects revenues between $1.519 billion and $1.577 billion. Earnings are expected in the range of $1.85-$1.95 per share.

For the first quarter, the Zacks Consensus Estimate for earnings is pegged at $1.90 per share, unchanged over the past 30 days and indicating growth of 21.8% from the figure reported in the year-ago quarter.

The consensus estimate for revenues is pegged at $1.55 billion, suggesting an improvement of 18.3% from the year-ago quarter’s reported figure.

Microchip’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an earnings surprise of 6.9%, on average.
 

 

Let’s see how things have shaped up for Microchip prior to this announcement.

Factors to Consider

Microchip is riding on consistent strength in its analog and microcontroller businesses. The company is expected to have gained from dominance of its 8, 16 and 32-bit microcontrollers.

The company’s fiscal first-quarter results are likely to reflect gains from demand recovery across its global business environment, particularly in automotive, industrial and consumer end-markets, on easing of lockdowns and relaxation of shelter-in-place guidelines.

Improving demand across office equipment and communication infrastructures, courtesy of requirement for cloud computing solutions and booming PC market amid the coronavirus crisis-led work-from-home wave, bodes well.

Strong demand for Microchip’s Power over Ethernet (PoE) to USB-C adapter, as well as META-DX1 suite of Ethernet products, may have driven microcontrollers’ fiscal first-quarter performance.

Microchip’s fiscal first-quarter results are likely to have benefited from synergies from acquisitions, including Microsemi, Micrel and Atmel.

Sluggish enterprise spending and supply-chain disruptions owing to coronavirus crisis are expected to have hurt top-line growth.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Microchip has an Earnings ESP of +0.95% and carries a Zacks Rank #2 currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are a few other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat in their upcoming releases:

Avnet (AVT - Free Report) has an Earnings ESP of +9.82% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CyberArk Software (CYBR - Free Report) has an Earnings ESP of +37.93% and a Zacks Rank #2.

Bruker (BRKR - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #2.

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