Earnings Preview: Microchip Technology

| About: Microchip Technology (MCHP)

Microchip Technology (NASDAQ:MCHP) is expected to report Q2 earnings after the market close on Wednesday, October 4, with a conference call scheduled for 6:00 pm ET.


The consensus estimate is 21c for EPS and $218.31M for revenue, according to First Call. On Sept. 8 management raised Q2 guidance to EPS of 26c-27c and revenue of $206M-$214M.

Analyst Views

Thomas Weisel expects Microchip to deliver revenues consistent with its revised revenue guidance of 12%-14% quarter-over-quarter growth, versus prior 7%-9% target. Gross margin guidance is for an improvement of 350-400bps quarter-over-quarter. Looking forward: Weisel believes Microchip could guide Q3 revenues in-line with its $224.5M, up 3% quarter-over-quarter, estimate. This will be driven by continuing improvements in automotive and industrial end-market demand. Weisel expects management to project a cautious though confident tone on end-market demand. The firm projects gross margin could expand by roughly 130bps sequentially, and the non-GAAP EPS guidance could exceed Weisel's 25c estimate.