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Microchip (MCHP) Q1 Earnings Top Estimates, Revenues Rise Y/Y
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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.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
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).
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Microchip (MCHP) Q1 Earnings Top Estimates, Revenues Rise Y/Y
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.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
Microchip Technology Incorporated price-consensus-eps-surprise-chart | Microchip Technology Incorporated Quote
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.