Microchip Tech Beats Q1 Estimates, Shares Fall on Outlook

Microchip Technology reported first-quarter net sales of $1.08 billion, exceeding analyst expectations but marking a 13.4% year-over-year decline. Adjusted earnings per share were $0.27, also beating estimates, while next quarter sales are forecasted between $1.11 billion and $1.15 billion, matching analysts' projections. Despite these results, shares dropped 6% in after-hours trading as guidance indicated only modest growth and continued margin pressures from underutilization charges and inventory write-downs. CEO Steve Sanghi cited improvements in manufacturing and inventory management, with most end markets showing demand recovery except for automotive. Operational flexibility and execution of a recovery plan supported sequential revenue growth and a stronger financial position. Microchip’s future earnings outlook and estimate revisions are expected to drive investor sentiment.