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Microchip (MCHP) Q4 Earnings Top Estimates, Revenues Rise Y/Y
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Microchip Technology (MCHP - Free Report) reported fourth-quarter fiscal 2022 non-GAAP earnings of $1.35 per share, which beat the Zacks Consensus Estimate by 8% and surged 45.2% on a year-over-year basis.
Net sales of $1.844 billion increased 25.7% year over year and surpassed the Zacks Consensus Estimate by 1.3%.
Quarter in Detail
In terms of product lines, microcontroller sales grew 28.3% year over year and 7.6% sequentially to $1.045 billion, accounting for 56.7% of revenues. The strong growth in microcontroller sales is due to the solid demand for 32-bit controllers, which represented 46.5% of microcontroller sales.
Analog net sales of $514.5 million increased 3% sequentially and 24.2% year over year. Analog contributed 27.9% to total revenues.
Other revenues of $284 million accounted for 15.4% of revenues.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
Geographically, revenues from the Americas, Europe, and Asia were up 21.4%, 25%, and 27.9% year over year, respectively.
Non-GAAP gross margin expanded 250 basis points (bps) on a year-over-year basis to 66.6%, primarily benefiting from a favorable product mix.
Non-GAAP research & development expenses, as a percentage of net sales, declined 90 bps year over year to 12.9%. Non-GAAP selling, general & administrative expenses, as a percentage of net sales, declined 70 bps to 9%.
Non-GAAP operating expenses, as a percentage of net sales, declined 150 bps year over year to 21.9%.
Consequently, non-GAAP operating margin expanded 400 bps on a year-over-year basis to 44.7%.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash and short-term investments totaled $319.4 million compared with $315.5 million on Dec 31, 2021.
As of Mar 31, 2022, its total debt (long-term plus current portion) of $7.9 billion remained flat with the Dec 31, 2021 level. The company paid $205.9 million of debt in the fiscal fourth quarter.
For the fiscal fourth quarter, cash flow from operating activities was $747.7 million compared with $853.4 million reported in the prior quarter.
Microchip announced a quarterly dividend of 27.6 cents per share, up 9.1% sequentially and 33.7% from the year-ago quarter.
Guidance
Microchip forecasts first-quarter fiscal 2023 net sales of $1.918-$1.992 billion, indicating 4-8% sequential growth. Net sales are expected to witness 24.6% year-over-year growth at the midpoint of the guidance.
Non-GAAP earnings are anticipated in the range of 47-50 cents per share.
Non-GAAP gross margin is anticipated within 66.8-67.2%.
Non-GAAP operating expenses are projected in the band of 21.6-22%.
Non-GAAP operating margin is anticipated in the range of 44.8-45.6%.
Capital expenditure for the fiscal first quarter is expected between $120 million and $140 million. Capital expenditure for fiscal 2023 is estimated between $450 million and $550 million.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #4 (Sell).
Microchip’s shares have tumbled 26.1% compared with the Zacks Computer and Technology sector’s decline of 24.1% in the year-to-date period.
Here are some better-ranked stocks in the broader sector.
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Microchip (MCHP) Q4 Earnings Top Estimates, Revenues Rise Y/Y
Microchip Technology (MCHP - Free Report) reported fourth-quarter fiscal 2022 non-GAAP earnings of $1.35 per share, which beat the Zacks Consensus Estimate by 8% and surged 45.2% on a year-over-year basis.
Net sales of $1.844 billion increased 25.7% year over year and surpassed the Zacks Consensus Estimate by 1.3%.
Quarter in Detail
In terms of product lines, microcontroller sales grew 28.3% year over year and 7.6% sequentially to $1.045 billion, accounting for 56.7% of revenues. The strong growth in microcontroller sales is due to the solid demand for 32-bit controllers, which represented 46.5% of microcontroller sales.
Analog net sales of $514.5 million increased 3% sequentially and 24.2% year over year. Analog contributed 27.9% to total revenues.
Other revenues of $284 million accounted for 15.4% of revenues.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
Microchip Technology Incorporated price-consensus-eps-surprise-chart | Microchip Technology Incorporated Quote
Geographically, revenues from the Americas, Europe, and Asia were up 21.4%, 25%, and 27.9% year over year, respectively.
Non-GAAP gross margin expanded 250 basis points (bps) on a year-over-year basis to 66.6%, primarily benefiting from a favorable product mix.
Non-GAAP research & development expenses, as a percentage of net sales, declined 90 bps year over year to 12.9%. Non-GAAP selling, general & administrative expenses, as a percentage of net sales, declined 70 bps to 9%.
Non-GAAP operating expenses, as a percentage of net sales, declined 150 bps year over year to 21.9%.
Consequently, non-GAAP operating margin expanded 400 bps on a year-over-year basis to 44.7%.
Balance Sheet & Cash Flow
As of Mar 31, 2022, cash and short-term investments totaled $319.4 million compared with $315.5 million on Dec 31, 2021.
As of Mar 31, 2022, its total debt (long-term plus current portion) of $7.9 billion remained flat with the Dec 31, 2021 level. The company paid $205.9 million of debt in the fiscal fourth quarter.
For the fiscal fourth quarter, cash flow from operating activities was $747.7 million compared with $853.4 million reported in the prior quarter.
Microchip announced a quarterly dividend of 27.6 cents per share, up 9.1% sequentially and 33.7% from the year-ago quarter.
Guidance
Microchip forecasts first-quarter fiscal 2023 net sales of $1.918-$1.992 billion, indicating 4-8% sequential growth. Net sales are expected to witness 24.6% year-over-year growth at the midpoint of the guidance.
Non-GAAP earnings are anticipated in the range of 47-50 cents per share.
Non-GAAP gross margin is anticipated within 66.8-67.2%.
Non-GAAP operating expenses are projected in the band of 21.6-22%.
Non-GAAP operating margin is anticipated in the range of 44.8-45.6%.
Capital expenditure for the fiscal first quarter is expected between $120 million and $140 million. Capital expenditure for fiscal 2023 is estimated between $450 million and $550 million.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #4 (Sell).
Microchip’s shares have tumbled 26.1% compared with the Zacks Computer and Technology sector’s decline of 24.1% in the year-to-date period.
Here are some better-ranked stocks in the broader sector.
Analog Devices (ADI - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ADI shares have declined 11.7% in the year-to-date period. ADI is scheduled to report second-quarter 2022 results on May 18.
Cisco Systems (CSCO - Free Report) presently carries a Zacks Rank of 2.
Cisco shares have declined 20.2% in the year-to-date period. CSCO is slated to report third-quarter fiscal 2022 results on May 18.
Broadcom (AVGO - Free Report) carries a Zacks Rank of 2 at present.
Broadcom shares have declined 15.4% in the year-to-date period. AVGO is scheduled to report first-quarter fiscal 2022 results on Jun 2.