Microchip Technology beats analyst estimates in FQ3 2019

Microchip Technologies beats analyst estimates in FQ3 2019.
Image: Microchip Technologies/YouTube

On Tuesday, Microchip Technology released its earnings results for the period ending December 31, 2019. While the firm reported a decline in sales, it also showed a significant improvement in annual net income generation. Moreover, the manufacturer beat market analyst expectations regarding its performance last quarter.

Microchip’s FQ3 2019 Results

In the fiscal third quarter, Microchip brought in $1.28 billion in revenue, down 6.5 percent from FQ3 2018. Moreover, the manufacturer earned $311.1 million in profits, an increase of 84 percent year-over-year. As such, the company garnered $1.20 per diluted share, up from $.20 per diluted share in the same frame last year.

Notably, Microchip beat analysis firm Zacks Equity Research’s net income estimate by 4.76 percent. In fact, the manufacturer has defined earnings expectations for the last four quarters. In an earnings call, CEO Steve Sanghi remarked his company met the quarterly earnings expectations it offered in November.

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Microchip’s FQ4 2019 Guidance

Sanghi also offered guidance for Microchip’s financial performance during the fiscal fourth quarter of 2019. The company projects a 2 to 9 percent increase in revenue, translating to sales of $1.31 billion to $1.4 billion. The firm is also forecasting net income of $36 million to $66 million in the period ending March 31.

Microchip’s chief executive explained his optimistic outlook by noting a recent surge in customers requesting expedited shipments. Indeed, Sanghi said FQ3 2019 represents the low end of his firm’s sales cycle, barring another flare-up in the U.S. China trade war or unanticipated complications related to the coronavirus.

The manufacturer also noted it released a few new products last quarter that could have a positive impact on its future sales. The firm introduced a new field-programmable gate array called PolarFire in the period ending December 31. The component allows for high rates of data transfer in systems designed for aerospace and the ever-important Internet of Things (IOT).

Besides, Microchip debuted a new low-power Bluetooth 5.0 integrated circuit, a host of Serial Peripheral Interface EERAM memory products, and a series of open-source data center resource management tools.

It’s worth noting that the Chandler, Arizona-based company revised its FQ3 2019 guidance upward twice before reporting its results. Consequently, the corporation might similarly adjust its projected FQ4 2019 earnings if its new and existing products continue to see steady demand.


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