Microchip Technology (NASDAQ:MCHP) Releases Earnings Results, Beats Estimates By $0.03 EPS

Microchip Technology (NASDAQ:MCHP) issued its quarterly earnings data on Thursday. The semiconductor company reported $0.97 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.94 by $0.03, FiscalAI reports. Microchip Technology had a net margin of 9.34% and a return on equity of 14.97%. The company had revenue of $1.62 billion for the quarter, compared to analyst estimates of $1.61 billion. During the same period last year, the company posted $0.35 earnings per share. Microchip Technology’s revenue was up 42.2% compared to the same quarter last year.

Here are the key takeaways from Microchip Technology’s conference call:

• September-quarter sales rose 42.2% year over year to $1.622 billion, and non-GAAP EPS of $0.97 beat the guidance midpoint by $0.04. Results included about $53 million of one-time revenue that the company does not expect to recur in December.
• Bookings remained strong, the book-to-bill ratio was well above one, and backlog entering December was higher than entering September. Management cited broad growth across industrial, aerospace and defense, automotive, and other markets, while warning that supply constraints are delaying some shipments.
• December-quarter revenue guidance is flat to down 3% sequentially at the midpoint, with non-GAAP gross margin expected at 64%–65%, below September’s 66.5%. The company cited the absence of one-time revenue, constrained shipments of high-margin products, lower utilization, and rising supplier costs.
• Data-center sales exceeded $250 million in September, and Microchip said its data-center business is on track for $1 billion in calendar 2026. It reported 24 Gen 6 PCIe switch and retimer design wins, with shipments expected to ramp as more designs enter production next year; management noted volumes could be affected if data-center investment slows.
• Net debt declined despite funding the Hailo acquisition, and leverage was 2.36 times trailing adjusted EBITDA; management expects leverage to keep falling. The company plans to maintain its dividend for now and revisit capital returns as it moves into the next fiscal year.

Microchip Technology Stock Down 12.9%

Shares of MCHP traded down $8.34 during trading on Friday, reaching $56.51. The company’s stock had a trading volume of 18,561,004 shares, compared to its average volume of 10,420,718. The company has a market cap of $30.69 billion, a price-to-earnings ratio of 84.26, a P/E/G ratio of 0.52 and a beta of 1.84. Microchip Technology has a twelve month low of $48.52 and a twelve month high of $105.91. The company has a fifty day moving average of $75.19 and a two-hundred day moving average of $79.48. The company has a quick ratio of 1.11, a current ratio of 1.92 and a debt-to-equity ratio of 0.83.

Microchip Technology Announces Dividend

The business also recently announced a quarterly dividend, which will be paid on Tuesday, December 8th. Stockholders of record on Monday, November 23rd will be given a $0.4550 dividend. The ex-dividend date of this dividend is Monday, November 23rd. This represents a $1.82 annualized dividend and a dividend yield of 3.2%. Microchip Technology’s dividend payout ratio is presently 271.64%.

Analyst Upgrades and Downgrades

Several equities research analysts have issued reports on MCHP shares. Rosenblatt Securities cut their target price on Microchip Technology from $120.00 to $115.00 and set a “buy” rating for the company in a research note on Friday. Susquehanna lowered their price target on Microchip Technology from $120.00 to $100.00 and set a “positive” rating for the company in a report on Friday. Truist Financial cut their price objective on Microchip Technology from $105.00 to $90.00 and set a “hold” rating for the company in a research report on Friday, August 7th. BMO Capital Markets began coverage on shares of Microchip Technology in a report on Friday, August 21st. They issued an “outperform” rating and a $95.00 price objective on the stock. Finally, TD Cowen decreased their target price on shares of Microchip Technology from $90.00 to $75.00 and set a “hold” rating on the stock in a research report on Monday, October 19th. Three analysts have rated the stock with a Strong Buy rating, thirteen have given a Buy rating and eight have assigned a Hold rating to the company. According to data from MarketBeat.com, the stock has an average rating of “Moderate Buy” and a consensus price target of $94.24.

Insider Transactions at Microchip Technology

In other Microchip Technology news, CFO James Bjornholt sold 4,112 shares of the business’s stock in a transaction on Tuesday, August 25th. The stock was sold at an average price of $75.32, for a total transaction of $309,715.84. Following the completion of the transaction, the chief financial officer owned 28,573 shares in the company, valued at approximately $2,152,118.36. The trade was a 12.58% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 1.79% of the company’s stock.

Microchip Technology News Roundup

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Fiscal Q2 earnings were $0.97 per share versus the $0.94 consensus, while revenue of $1.62 billion also topped expectations. Revenue rose 42.2% year over year. Microchip Technology Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: The company declared a quarterly dividend of $0.455 per share, equivalent to $1.82 annually and a stated yield of 3.2%, providing ongoing income for shareholders.
• Neutral Sentiment: Management cited stronger industrial and data-center demand, but also highlighted supply constraints and rising costs that could limit near-term growth. Q2 Earnings Call Highlights Supply Constraints and Growth
• Negative Sentiment: Microchip’s December-quarter guidance was the main concern: revenue is forecast to range from down 3% to up 1% sequentially, with non-GAAP EPS of $0.87–$0.95. The midpoint fell short of analyst expectations, tempering the impact of the Q2 beat. Analysts Slash Their Forecasts After Q2 Results
• Negative Sentiment: Several firms lowered price targets after the results, including Wells Fargo ($80 to $70), B. Riley ($98 to $85) and Evercore ISI ($117 to $75). Most cited firms retained favorable or neutral ratings, but the cuts underscore more cautious expectations. Evercore ISI Adjusts Price Target

About Microchip Technology

Microchip Technology Incorporated (NASDAQ:MCHP) develops and manufactures semiconductor products used in embedded control and connected electronic systems. Its portfolio includes microcontrollers, microprocessors, analog and power-management devices, memory products, timing and connectivity components, security solutions, and field-programmable gate arrays. The company also provides development tools, software, evaluation kits, and technical support to help customers design and produce electronic equipment.

Microchip’s products are used across a range of markets, including automotive, industrial, aerospace and defense, communications, consumer electronics, data centers, and medical applications.