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For the second quarter of fiscal 2027, Microchip expects net sales between $1.589 billion and $1.618 billion, indicating sequential growth of 7-9%, with the midpoint implying approximately 40.6% year-over-year growth. Non-GAAP earnings are projected at 91-95 cents per share.
The Zacks Consensus Estimate for fiscal second-quarter revenues is currently pegged at $1.61 billion, indicating growth of 41% from the figure reported in the year-ago quarter. The consensus mark for earnings is currently pegged at 94 cents per share, up by a penny over the past 30 days. The figure indicates a 168.6% jump from the year-ago quarter’s reported figure.
Microchip is expected to have benefited from strengthening semiconductor demand, improving inventory conditions, robust bookings, accelerating data center investments and recovering industrial and automotive markets in the second quarter of fiscal 2027. Higher factory utilization, favorable product mix, pricing adjustments and disciplined expense management are likely to have supported profitability. However, supply-chain constraints, rising manufacturing costs and macroeconomic uncertainties are likely to have posed challenges.
Microchip Technology Incorporated Price and EPS Surprise
MCHP’s earnings beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, delivering an average surprise of 7.74%.
Let us see how things have shaped up for the upcoming announcement.
Factors Likely to Have Influenced MCHP’s Q2 Performance
Microchip’s fiscal second-quarter performance is likely to have benefited from robust customer bookings, improving distribution sell-through and the normalization of semiconductor inventories. In the first quarter of fiscal 2027, the company recorded its strongest bookings in approximately four years, with a book-to-bill ratio well above one. Distribution sell-through increased 17% sequentially, while channel inventory declined to 25 days.
The momentum continued into the second quarter, with strong bookings in July and August across product lines, business units and geographies. The expanding backlog, improving customer engagement and gradual replenishment of depleted distributor inventories are expected to have supported revenue growth in the to-be-reported quarter.
Increasing investments in AI infrastructure and data center connectivity are expected to have been significant growth catalysts. Demand for PCIe switches, storage controllers, power management solutions, microcontrollers, timing devices and security products is likely to have supported fiscal second-quarter revenues. Growing adoption of Microchip's data center portfolio across hyperscale and enterprise infrastructure is expected to have strengthened its competitive positioning.
However, Microchip is likely to have faced challenges from tightening semiconductor manufacturing capacity, particularly across third-party foundries, substrates, assembly and testing operations. The company highlighted capacity constraints across multiple foundry process nodes, alongside increasing pressure on outsourced semiconductor assembly and test providers.
Strong AI-related demand has been absorbing manufacturing capacity, potentially limiting the availability of resources for other semiconductor products. Lengthening lead times and difficulties fulfilling expedited customer orders are likely to have constrained Microchip's ability to fully capitalize on improving demand in the second quarter.
What Our Model Says
According to 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, which is the case here.
Microchip currently has an Earnings ESP of +3.31% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
View the Zacks #1 Rank List
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Microchip Set to Report Q2 Earnings: What's in Store for the Stock?
Key Takeaways
Microchip (MCHP - Free Report) is scheduled to release second-quarter fiscal 2027 results on Nov. 5.
For the second quarter of fiscal 2027, Microchip expects net sales between $1.589 billion and $1.618 billion, indicating sequential growth of 7-9%, with the midpoint implying approximately 40.6% year-over-year growth. Non-GAAP earnings are projected at 91-95 cents per share.
The Zacks Consensus Estimate for fiscal second-quarter revenues is currently pegged at $1.61 billion, indicating growth of 41% from the figure reported in the year-ago quarter. The consensus mark for earnings is currently pegged at 94 cents per share, up by a penny over the past 30 days. The figure indicates a 168.6% jump from the year-ago quarter’s reported figure.
Microchip is expected to have benefited from strengthening semiconductor demand, improving inventory conditions, robust bookings, accelerating data center investments and recovering industrial and automotive markets in the second quarter of fiscal 2027. Higher factory utilization, favorable product mix, pricing adjustments and disciplined expense management are likely to have supported profitability. However, supply-chain constraints, rising manufacturing costs and macroeconomic uncertainties are likely to have posed challenges.
Microchip Technology Incorporated Price and EPS Surprise
Microchip Technology Incorporated price-eps-surprise | Microchip Technology Incorporated Quote
MCHP’s earnings beat the Zacks Consensus Estimate for earnings in all the trailing four quarters, delivering an average surprise of 7.74%.
Let us see how things have shaped up for the upcoming announcement.
Factors Likely to Have Influenced MCHP’s Q2 Performance
Microchip’s fiscal second-quarter performance is likely to have benefited from robust customer bookings, improving distribution sell-through and the normalization of semiconductor inventories. In the first quarter of fiscal 2027, the company recorded its strongest bookings in approximately four years, with a book-to-bill ratio well above one. Distribution sell-through increased 17% sequentially, while channel inventory declined to 25 days.
The momentum continued into the second quarter, with strong bookings in July and August across product lines, business units and geographies. The expanding backlog, improving customer engagement and gradual replenishment of depleted distributor inventories are expected to have supported revenue growth in the to-be-reported quarter.
Increasing investments in AI infrastructure and data center connectivity are expected to have been significant growth catalysts. Demand for PCIe switches, storage controllers, power management solutions, microcontrollers, timing devices and security products is likely to have supported fiscal second-quarter revenues. Growing adoption of Microchip's data center portfolio across hyperscale and enterprise infrastructure is expected to have strengthened its competitive positioning.
However, Microchip is likely to have faced challenges from tightening semiconductor manufacturing capacity, particularly across third-party foundries, substrates, assembly and testing operations. The company highlighted capacity constraints across multiple foundry process nodes, alongside increasing pressure on outsourced semiconductor assembly and test providers.
Strong AI-related demand has been absorbing manufacturing capacity, potentially limiting the availability of resources for other semiconductor products. Lengthening lead times and difficulties fulfilling expedited customer orders are likely to have constrained Microchip's ability to fully capitalize on improving demand in the second quarter.
What Our Model Says
According to 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, which is the case here.
Microchip currently has an Earnings ESP of +3.31% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are some other companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Forgent Power Solutions (FPS - Free Report) has an Earnings ESP of +6.06% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Forgent Power shares have dropped 15.3% year to date (YTD). Forgent Power is scheduled to report its first-quarter fiscal 2027 results on Nov. 12.
Telos (TLS - Free Report) currently has an Earnings ESP of +5.26% and sports a Zacks Rank #1.
Telos shares have inched up 2.2% YTD. Telos is slated to report its third-quarter 2026 results on Nov. 9.
NVIDIA (NVDA - Free Report) currently has an Earnings ESP of +3.46% and has a Zacks Rank #2.
NVIDIA shares have climbed 8.4% YTD. NVIDIA is set to report its third-quarter fiscal 2027 results on Nov. 17.