The 10-second takeaway
For the quarter ended Dec. 31 (Q3), Microchip Technology beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Microchip Technology reported revenue of $416.0 million. The 16 analysts polled by S&P Capital IQ looked for a top line of $411.7 million on the same basis. GAAP reported sales were 26% higher than the prior-year quarter's $329.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.41. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.39 per share. GAAP EPS of $0.05 for Q3 were 87% lower than the prior-year quarter's $0.38 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 48.2%, 760 basis points worse than the prior-year quarter. Operating margin was 4.8%, 2,180 basis points worse than the prior-year quarter. Net margin was 2.4%, 2,110 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $417.1 million. On the bottom line, the average EPS estimate is $0.42.
Next year's average estimate for revenue is $1.58 billion. The average EPS estimate is $1.75.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 315 members out of 335 rating the stock outperform, and 20 members rating it underperform. Among 109 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 108 give Microchip Technology a green thumbs-up, and one give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Microchip Technology is outperform, with an average price target of $34.89.
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