Microchip Technology Reports Q1 Revenue Above Estimates, Shares Rise

Microchip Technology reported better-than-expected fourth-quarter results with net sales of $970.5 million, despite a 26.8% year-over-year decline, marking what management believes is the bottom of a prolonged industry downturn. The company issued an optimistic first-quarter revenue forecast of $1.02 billion to $1.07 billion, surpassing analyst estimates, alongside an adjusted EPS guidance of 18 to 26 cents, also above consensus. CEO Steve Sanghi highlighted progress in inventory reduction and manufacturing optimization, with April bookings exceeding any month in the prior quarter and the first positive book-to-bill ratio in nearly three years. Microchip's strategic focus on expanding atomic clock technology, microprocessors, and ethernet solutions positions it well to capitalize on growth in automotive, industrial, and e-mobility markets. While optimistic about future opportunities, the company remains cautious about geopolitical risks and potential tariff impacts. The market responded positively, with shares rising between 5.7% and 8% in extended trading following the announcements.