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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 2024 results on Aug 3.

For the quarter, Microchip expects net sales in the range of $2.255-$2.322 billion, indicating 2.5% sequential growth. At the mid-point of the guidance, net sales are expected to grow 16.5% year over year.

Non-GAAP earnings are anticipated between $1.63 per share and $1.65 per share.

The Zacks Consensus Estimate for fiscal first-quarter earnings is pegged at $1.64 per share, unchanged over the past 30 days, indicating growth of 19.71% from the figure reported in the year-ago quarter.

The consensus estimate for revenues is pegged at $2.29 billion, suggesting an improvement of 16.55% from the year-ago quarter’s reported figure.

Microchip’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, delivering an earnings surprise of 1.38% on average.

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

Factors to Consider

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

Mixed-signal microcontrollers represented 58% of the company’s fourth-quarter fiscal 2023 revenues.

Our model estimates fiscal first-quarter mixed-signal microcontrollers revenues of $1.29 billion, indicating 21.2% year-over-year growth.

Microchip’s fiscal first-quarter results are expected to benefit from strong industrial, automotive, aerospace and defense, and data center end markets. Nevertheless, weakness in the consumer end market is expected to have hurt its top-line growth.

Moreover, raging inflation and higher interest rates are expected to have hurt profitability.

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 -2.19% and a Zacks Rank #3, 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:

Itron (ITRI - Free Report) has an Earnings ESP of +7.61% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Itron shares have gained 51.1% year to date. ITRI is set to report its second-quarter 2023 results on Aug 3.

Super Micro Computer (SMCI - Free Report) has an Earnings ESP of +15.84% and a Zacks Rank of 1, at present.

Super Micro shares have surged 307.4% year to date. SMCI is set to report its fourth-quarter fiscal 2023 results on Aug 8.

Vertiv (VRT - Free Report) has an Earnings ESP of +4.65% and a Zacks Rank #1.

Vertiv shares have gained 90.3% in the year-to-date period. VRT is set to report its second-quarter 2023 results on Aug 2.

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

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