MCHP Earnings Prediction
The chart below shows how MCHP performed 10 days before and after its earnings report, based on data from the past quarters. Typically, MCHP sees a +1.57% change in stock price 10 days leading up to the earnings, and a +4.73% change 10 days following the report. On the earnings day itself, the stock moves by -0.50%. This data can give you a slight idea of what to expect for the next quarter's release.
MCHP Key Earning Data
2024/Q4
Year Over Year
Quarter Over Quarter
Total Revenue
1.03B
-41.89%
-11.84%
Gross Margin
42.77%
-22.04%
-8.81%
Operating Margin
3.35%
-88.85%
-73.68%
Net Margin
-5.22%
-121.99%
-177.45%
EPS
-0.10
-112.99%
-171.43%
No Data Available
MCHP Earnings Analysis
Microchip Technology Inc Corporation (MCHP.O) Earnings Conference Call
Positive
Strong December Sales Performance: Net sales for the December quarter reached $1.026 billion, demonstrating a strong revenue base despite challenging market conditions.
Gross Margin Efficiency: Non-GAAP gross margins were reported at 55.4%, reflecting effective cost management and operational efficiency.
Strong Cash Generation: Adjusted free cash flow for the December quarter was $244.6 million, indicating robust cash generation capabilities.
Convertible Bonds Retirement: The company retired $665.5 million in convertible bonds, enhancing its financial stability and reducing future interest obligations.
Capital Expenditure Forecast: Capital expenditures for fiscal year 2025 are expected to be around $135 million, with a forecast for lower expenditures in fiscal year 2026, indicating prudent capital management.
Negative
Earnings Per Share Shortfall: Microchip Technology Incorporated reported an EPS of $0.20, missing expectations of $0.2774, indicating a significant shortfall in earnings performance.
Net Sales Decline: Net sales for the December quarter were $1.026 billion, down 11.8% sequentially and down 41.9% year-over-year, reflecting a substantial decline in revenue.
Gross Margin Concerns: Gross margins were impacted by capacity underutilization charges of $42.7 million, resulting in a non-GAAP gross margin of 55.4%, which is a concerning indicator of operational efficiency.
Rising Operating Expenses: Operating expenses increased to 34.9% of net sales, with expectations for further increases in the March quarter due to the end of employee pay cuts, indicating rising cost pressures.
Debt to EBITDA Ratio Increase: The net debt to adjusted EBITDA ratio rose to 3.78, up from 1.27 a year earlier, highlighting a deterioration in financial leverage and increased debt burden.
MCHP FAQs
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MCHP Earning Call Sentiment
Microchip Technology Incorporated (NASDAQ:MCHP) Q3 2025 Earnings Call Transcript
MCHP.O
-4.43%Positive
The earnings call reflects several concerning factors: a GAAP net loss, increased inventory days indicating management challenges, and a significant rise in net debt to EBITDA ratio, showing increased leverage. The Q&A reveals uncertainty in inventory correction and gross margin recovery. Despite strong cash flow, the high inventory and lack of clear guidance on long-term earnings power suggest potential market apprehension. While there are no immediate plans to cut dividends, the overall sentiment points towards a negative outlook due to operational inefficiencies and financial challenges.
