Microchip Q1 Earnings Meet Estimates, Sales Up Year-over-Year, Reflecting Momentum in Mixed Signal Microcontroller Business
August 6, 2023
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Microchip Technology ($NASDAQ:MCHP), Inc. is a leading provider of semiconductor products and technologies, including microcontrollers, analog and digital signal controllers, as well as programmable logic solutions. The company is listed on the Nasdaq and has been a reliable performer in the tech sector for many years. In its first quarter of fiscal 2024, Microchip reported that its mixed signal microcontroller business showed sustained progress. This demonstrates growing momentum in an important segment of the company’s operations.
The increased revenue was driven by higher demand for Microchip’s eight, sixteen, and thirty-two-bit microcontrollers, particularly those used in automotive, consumer, and industrial applications. This growth was offset by declines in sales of analog and interface products, though Microchip still expects strong demand for these products in the coming quarters. Overall, Microchip’s Q1 results demonstrate the strength of the company’s strategy to focus on mixed signal microcontroller business.
Earnings
MICROCHIP TECHNOLOGY recently released its earnings report for the fiscal year 2024 Q1 as of June 30 2021. Results showed that the company earned 1569.4M USD in total revenue and 252.8M USD in net income, representing a 20.1% decrease in total revenue and a 50.2% decrease in net income year-over-year. This is seen from the total revenue that has increased from 1569.4M USD to 2288.6M USD in the past 3 years.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Microchip Technology. More…
| Total Revenues | Net Income | Net Margin |
| 8.76k | 2.4k | 27.6% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Microchip Technology. More…
| Operations | Investing | Financing |
| 3.77k | -586.6 | -3.29k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Microchip Technology. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 16.49k | 9.66k | 12.55 |
Key Ratios Snapshot
Some of the financial key ratios for Microchip Technology are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 18.5% | 65.7% | 37.7% |
| FCF Margin | ROE | ROA |
| 37.6% | 30.9% | 12.5% |
Stock Price
MICROCHIP TECHNOLOGY released its first quarter earnings report on Friday, meeting analysts’ estimates and reporting an increase in sales year-over-year. The company’s mixed signal microcontroller business, which is a large part of its revenue stream, has been driving recent success. The earnings report saw its stock open at $86.0, but close at $83.5, a 6.8% drop from the prior closing price of 89.5.
Despite this, the company has seen some steady gains due to its increasing focus on microcontrollers and other chips. Overall, the company’s earnings reflect the momentum it has been building up in this sector. Live Quote…
Analysis
At GoodWhale, we conducted an analysis of MICROCHIP TECHNOLOGY‘s wellbeing. Our Star Chart showed that MICROCHIP TECHNOLOGY had a high health score of 8/10 when it comes to its cashflows and debt, indicating that the company is capable to pay off debt and fund future operations. Additionally, MICROCHIP TECHNOLOGY also showed strengths in asset, dividend, growth, and profitability. Based on our assessment, we classified MICROCHIP TECHNOLOGY as a ‘gorilla’, a type of company that has achieved stable and high revenue or earning growth due to its strong competitive advantage. This makes the company attractive for investors who are looking for a secure and reliable growth in their portfolio. Investors who have a longer-term strategy in mind may be particularly interested in this type of company. More…
Peers
Microchip Technology Inc is a publicly traded company that designs, develops, and manufactures semiconductor products for a variety of embedded control applications. The company offers microcontrollers, development tools, analog and interface products, wireless and wired connectivity products, memory products, and digital power products. It serves customers in the automotive, communications, computing, consumer, and industrial markets. The company was founded in 1987 and is headquartered in Chandler, Arizona.
Globetronics Technology Bhd is a Malaysia-based company that provides semiconductor assembly and test services. It offers a range of services, including wafer fabrication, wafer probing, final test, packaging, and others. The company serves customers in the automotive, communications, computing, consumer, and industrial markets.
Wafer Works Corp is a Taiwan-based company that provides wafer foundry services. It offers a range of services, including wafer fabrication, final test, and packaging. The company serves customers in the automotive, communications, computing, consumer, and industrial markets.
Skyworks Solutions Inc is a publicly traded company that designs, develops, and manufactures semiconductor products for a variety of radio frequency (RF) and microwave applications. The company offers a range of products, including amplifiers, attenuators, circulators, detectors, diodes, directional couplers, mixers, modulators, oscillators, phase shifters, power dividers/combiners, receivers, switches, and transmitters. It serves customers in the automotive, communications, computing, consumer, industrial, medical, military, and aerospace markets.
– Globetronics Technology Bhd ($KLSE:7022)
Globetronics Technology Bhd is a Malaysian-based company that designs, manufactures and supplies precision sensors, optical and electronic products. The company has a market cap of 696.22M as of 2022 and a Return on Equity of 11.73%. Globetronics Technology Bhd’s products are used in a variety of industries including automotive, healthcare, consumer electronics and industrial.
– Wafer Works Corp ($TPEX:6182)
Wafer Works Corp is a leading provider of semiconductor wafers with a market cap of 21.1B as of 2022. The company has a return on equity of 16.27%. Wafer Works Corp is a leading provider of semiconductor wafers used in the manufacture of integrated circuits. The company’s wafers are used in a variety of electronic devices, including computers, cell phones, and other electronic devices.
– Skyworks Solutions Inc ($NASDAQ:SWKS)
Skyworks Solutions Inc is a company that manufactures radio frequency and microwave semiconductor products. The company has a market cap of 13.11B as of 2022 and a ROE of 25.56%. The company’s products are used in a wide variety of wireless communication applications, including smartphones, tablets, laptops, and other mobile devices.
Summary
Investors in MICROCHIP TECHNOLOGY were disappointed when the company’s first-quarter fiscal 2024 results came out, as the stock price moved down on the same day. Despite the company meeting analysts’ earnings estimates and seeing a year-over-year increase in sales, the market was not impressed. This could be due to the fact that MICROCHIP TECHNOLOGY had seen consistent growth in the mixed signal microcontroller business over the previous quarters, and investors may have been expecting more. Investors should keep an eye on the company’s performance to see if it is able to regain its momentum going forward.
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