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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 its first-quarter fiscal 2023 results on Aug 2.

For the quarter, Microchip expects net sales of $1.918-$1.992 billion, indicating 4-8% sequential growth. At the midpoint of this guidance, net sales are expected to grow 24.6% year over year.

Non-GAAP earnings are anticipated in the range of $1.32-$1.36 per share.

The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.34 per share, unchanged over the past 30 days and indicating growth of 35.35% from the figure reported in the year-ago quarter.

The consensus estimate for revenues is pegged at $1.96 billion, suggesting an improvement of 24.67% 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 3.93%, on average.

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

Factors to Consider

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

Microcontrollers represented 56.7% of Microchip’s fiscal fourth-quarter 2022 revenues.

Improving demand across office equipment and communication infrastructures, courtesy of the requirement for cloud-computing solutions, is expected to have aided the company.

However, supply-chain constraints, as well as lockdowns in China, are expected to have hurt top-line growth in the to-be-reported quarter. Rising commodity costs and labor costs are expected to have kept gross margin under pressure.

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. But that’s not the case here.

Microchip has an Earnings ESP of 0.00% and a Zacks Rank #4 (Sell), currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

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

Blink Charging (BLNK - Free Report) has an Earnings ESP of +1.40% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Blink shares are down 20.7% year to date. BLNK is set to report second-quarter 2022 results on Aug 8.

Fastly (FSLY - Free Report) has an Earnings ESP of +8.40% and a Zacks Rank #2.

Fastly shares have declined 67.9% on a year-to-date basis. The company is set to report second-quarter 2022 results on Aug 3.

Sabre (SABR - Free Report) has an Earnings ESP of +9.43% and a Zacks Rank #2.

Sabre shares are down 29% year to date. SABR is set to report second-quarter fiscal 2022 results on Aug 2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.