The 10-second takeaway
For the quarter ended June 30 (Q1), Microchip Technology beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share dropped.
Margins contracted across the board.
Microchip Technology recorded revenue of $462.8 million. The 13 analysts polled by S&P Capital IQ hoped for revenue of $454.7 million on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $352.1 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at $0.57. The 13 earnings estimates compiled by S&P Capital IQ forecast $0.54 per share. Non-GAAP EPS of $0.57 for Q1 were 19% higher than the prior-year quarter's $0.48 per share. GAAP EPS of $0.37 for Q1 were 5.1% lower than the prior-year quarter's $0.39 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 57.6%, 10 basis points worse than the prior-year quarter. Operating margin was 21.6%, 580 basis points worse than the prior-year quarter. Net margin was 17.0%, 540 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $471.9 million. On the bottom line, the average EPS estimate is $0.57.
Next year's average estimate for revenue is $1.87 billion. The average EPS estimate is $2.28.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 312 members out of 332 rating the stock outperform, and 20 members rating it underperform. Among 104 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 103 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 $41.70.
Is Microchip Technology the best semiconductor stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Microchip Technology to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.