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Microchip Technology (MCHP - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of 57 cents per share, which was in line with the Zacks Consensus Estimate but declined 65.2% on a year-over-year basis.
Net sales of $1.33 billion decreased 40.6% year over year and lagged the Zacks Consensus Estimate by 0.09%.
Quarter in Detail
Sales from mixed signal microcontroller, analog and other accounted for 52.5%, 24.8% and 22.7% of net sales, respectively.
Geographically, revenues from the Americas, Europe and Asia contributed 30.7%, 24.2% and 45.1% to net sales, respectively.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
Non-GAAP gross margin contracted 800 basis points (bps) on a year-over-year basis to 60.3%.
Non-GAAP research & development expenses, as a percentage of net sales, increased 400 bps year over year to 16.4%. Non-GAAP selling, general & administrative expenses, as a percentage of net sales, jumped 270 bps to 8.9%.
Non-GAAP operating expenses, as a percentage of net sales, increased 670 bps year over year to 22.5%.
Consequently, the non-GAAP operating margin declined to 32.9% compared with 47.6% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and short-term investments totaled $319.7 million compared with $281 million as of Dec 31, 2023.
As of Mar 31, 2024, total debt (long-term plus current portion) was $5.99 billion compared with $5.7 billion as of Dec 31.
For the fiscal fourth quarter, cash flow from operating activities was $430 million compared with $853.3 million in the previous quarter.
Free cash flow was $389.9 million compared with $793.8 million in the previous quarter.
Microchip returned roughly $629.9 million to shareholders in the fiscal fourth quarter through dividends of $242.5 million and share repurchases of approximately $387.4 million.
The company announced a quarterly dividend of 45.2 cents per share, up 18% from the year-ago quarter.
Guidance
Microchip expects net sales to be $1.22-$1.26 billion for the first quarter of fiscal 2025.
Non-GAAP earnings are anticipated between 48 cents per share and 56 cents per share.
Non-GAAP gross margin is anticipated between 59% and 61%.
Non-GAAP operating expenses are projected to be 28.25-28.75%.
Non-GAAP operating margin is anticipated to be 30.25-32.75%.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #3 (Hold).
MCHP shares have gained 4% compared with the Zacks Computer and Technology sector’s rise of 10.7% in the year-to-date period.
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Microchip (MCHP) Q4 Earnings Meet Estimates, Sales Decline Y/Y
Microchip Technology (MCHP - Free Report) reported fourth-quarter fiscal 2024 non-GAAP earnings of 57 cents per share, which was in line with the Zacks Consensus Estimate but declined 65.2% on a year-over-year basis.
Net sales of $1.33 billion decreased 40.6% year over year and lagged the Zacks Consensus Estimate by 0.09%.
Quarter in Detail
Sales from mixed signal microcontroller, analog and other accounted for 52.5%, 24.8% and 22.7% of net sales, respectively.
Geographically, revenues from the Americas, Europe and Asia contributed 30.7%, 24.2% and 45.1% to net sales, respectively.
Microchip Technology Incorporated Price, Consensus and EPS Surprise
Microchip Technology Incorporated price-consensus-eps-surprise-chart | Microchip Technology Incorporated Quote
Non-GAAP gross margin contracted 800 basis points (bps) on a year-over-year basis to 60.3%.
Non-GAAP research & development expenses, as a percentage of net sales, increased 400 bps year over year to 16.4%. Non-GAAP selling, general & administrative expenses, as a percentage of net sales, jumped 270 bps to 8.9%.
Non-GAAP operating expenses, as a percentage of net sales, increased 670 bps year over year to 22.5%.
Consequently, the non-GAAP operating margin declined to 32.9% compared with 47.6% reported in the year-ago quarter.
Balance Sheet & Cash Flow
As of Mar 31, 2024, cash and short-term investments totaled $319.7 million compared with $281 million as of Dec 31, 2023.
As of Mar 31, 2024, total debt (long-term plus current portion) was $5.99 billion compared with $5.7 billion as of Dec 31.
For the fiscal fourth quarter, cash flow from operating activities was $430 million compared with $853.3 million in the previous quarter.
Free cash flow was $389.9 million compared with $793.8 million in the previous quarter.
Microchip returned roughly $629.9 million to shareholders in the fiscal fourth quarter through dividends of $242.5 million and share repurchases of approximately $387.4 million.
The company announced a quarterly dividend of 45.2 cents per share, up 18% from the year-ago quarter.
Guidance
Microchip expects net sales to be $1.22-$1.26 billion for the first quarter of fiscal 2025.
Non-GAAP earnings are anticipated between 48 cents per share and 56 cents per share.
Non-GAAP gross margin is anticipated between 59% and 61%.
Non-GAAP operating expenses are projected to be 28.25-28.75%.
Non-GAAP operating margin is anticipated to be 30.25-32.75%.
Zacks Rank & Stocks to Consider
Microchip currently carries a Zacks Rank #3 (Hold).
MCHP shares have gained 4% compared with the Zacks Computer and Technology sector’s rise of 10.7% in the year-to-date period.
Bumble (BMBL - Free Report) , Airbnb (ABNB - Free Report) and NVIDIA (NVDA - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Bumble shares have declined 28.9% in the year-to-date period. BMBL is set to report its first-quarter 2024 results on May 8.
Airbnb shares have gained 19.1% year to date. ABNB is set to report its first-quarter 2024 results on May 8.
NVIDIA shares have gained 85.6% year to date. NVDA is set to report its first-quarter fiscal 2025 results on May 22.