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Microchip Technology Incorporated (MCHP)

  • Wed, Apr. 22, 5:57 PM
    • In addition to missing Q1 estimates, Texas Instruments (NASDAQ:TXN) is guiding for Q2 revenue of $3.12B-$3.38B and EPS of $0.60-$0.70, below a consensus of $3.43B and $0.73.
    • TI has fallen to $54.86 AH. Peers are also off: NXP (NASDAQ:NXPI) is down 2.6% to $100.00, ON Semi (NASDAQ:ONNN) is down 2.8% to $12.02, Linear (NASDAQ:LLTC) is down 2.5% to $46.40, Microchip (NASDAQ:MCHP) is down 1.6% to $48.49, and Maxim (NASDAQ:MXIM) is down 1.6% to $34.45. In addition to TI, Xilinx has provided soft top-line figures. Qualcomm has provided light guidance to go with an FQ2 beat, but hasn't blamed broader demand trends.
    • Aside from a strong dollar (hurting many tech companies), TI blames "continuing weakness in our communications equipment and personal electronics markets, particularly for wireless infrastructure equipment and PCs."
    • Q1 segment performance: Analog revenue +11% Y/Y to $2.04B; op. profit +45% to $721M. Embedded processing +2% to $672M; op. profit +137% to $123M. Other revenue (calculators, DLPs, royalties) -10% to $443M; op. profit -19% to $114M.
    • With TI aggressively trying to keep costs down (have they taken the strategy too far?), GAAP R&D spend fell by $28M Y/Y to $338M, and SG&A spend by $40M to $439M. Gross margin rose nearly 4% Y/Y to 57.7%. $670M was spent on buybacks. Only $123M (4% of revenue) was spent on capex.
    • TI's Q1 results, PR
  • Dec. 3, 2014, 1:48 PM
    • The Philadelphia Semi Index (SOXX +1.7%) is making fresh highs after Microchip (MCHP +4.1%) slightly upped its calendar Q4 guidance, and stated it continues to "see an improvement in our bookings and billings since our earnings call on October 30, 2014."
    • Chip stocks had also jumped following that earnings call, during which Microchip said it believed the inventory correction that triggered an Oct. 9 warning (and a major chip stock selloff) was mostly over. While a slew of chipmakers provided soft Q4 guidance after Microchip's warning, fears of a major correction didn't pan out.
    • The group outperformed a bit yesterday after Cypress (CY +2.9%) announced it's merging with Spansion (CODE +2.5%), continuing the chip industry's consolidation wave. Several firms have upgraded Cypress and/or Spansion in response, praising the deal's cost synergies.
    • Notable gainers include not only chipmakers, but also chip equipment, test/assembly, and IP licensing firms: ARMH +3.8%. AMBA +3%. MX +9%. MXIM +4.2%. AMCC +3.5%. ADI +3.1%. SIMG +3.7%. AMKR +4.2%. SPIL +3.3%. SYNA +2.7%. ATML +3.7%. ENTR +3.8%. AMAT +2.7%. KLAC +2.5%.
    • Last week: Chip stocks rally after ADI's earnings
  • Oct. 31, 2014, 11:31 AM
    • Three weeks after providing a calendar Q3 warning that triggered a massive chip stock rout, Microchip (MCHP +7.3%) has provided Q4 guidance that's in-line with lowered estimates. The microcontroller vendor, which has often seen trends emerge ahead of peers, also said it saw most of its inventory correction in Q3, and expects Q4 sales to be just "slightly below typical seasonal levels."
    • Chip stocks are up strongly (SOXX +4%) on a day the Nasdaq is up 1.4%. Since Microchip's warning, a slew of analog chipmakers and microcontroller firms (e.g. Atmel, Freescale, STMicro, Intersil, Linear) have offered light Q4 guidance, and other firms have reported seeing high-end Android weakness (e.g. Synaptics, Cirrus Logic, Amkor).
    • On the other hand, several mobile chipmakers (Skyworks, RF Micro, TriQuint, Silicon Motion), some of which have decent iPhone exposure, have provided strong results and/or guidance. Other chipmakers, such as Broadcom, Texas Instruments, and Xilinx, have rallied after delivering in-line guidance.
    • Susquehanna's Chris Caso: "By now, we think it’s clear that the weakness MCHP saw in September is not company specific ... The question now is if the full extent of the weakness has been dialed into estimates. If it has, then this would be among the shortest and mildest downturns in many years."
    • Notable gainers: SNDK +3.9%. MU +4.1%. AMAT +3.9%. TXN +4.7%. NXPI +3.9%. NVDA +3.5%. MXIM +4.7%. LLTC +5.1%. FCS +9.6%. FSL +8.8%ADI +6.5%. TQNT +6.8%. RFMD +6.5%. ATML +5.9%. AVGO +5.1%. MRVL +4.7%. AMCC +8.9%. BRCM +3.6%. TSM +4.4%. ARMH +3.3%.
    • Intel (INTC +3.5%) has recovered most of the losses it saw yesterday due to Intesil's (ISIL +3.3%) results and guidance, and related comments about a PC chip inventory correction.
  • Oct. 31, 2014, 9:06 AM
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  • Oct. 30, 2014, 5:23 PM
    • Microchip (NASDAQ:MCHP) expects FQ3 revenue of $508M-$535.3M and EPS of $0.59-$0.64, in-line with a consensus of $525.4M and $0.62. That's better than feared, given the warning issued three weeks ago (sent shockwaves throughout the chip industry).
    • The microcontroller vendor, known for experiencing industry swings ahead of many peers, says it saw "most" of its market correction in FQ2, and expects FQ3 revenue to be only "slightly below typical seasonal levels." Peers such as Atmel, STMicroelectronics, and Freescale have issued light Q4 guidance.
    • Gross margin rose 10 bps Y/Y in FQ2 to 59.1%. It's expected to fall to 58%-58.2% in FQ3.
    • Though officially below consensus, FQ2 revenue matched the guidance provided in Microchip's warning.
    • FQ2 results, PR
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  • Oct. 10, 2014, 12:45 PM
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  • Oct. 10, 2014, 9:59 AM
    • Microchip's (MCHP -12.5%) calendar Q3 warning, which was accompanied by a declaration that it believes "another industry correction has begun and that this correction will be seen more broadly across the industry in the near future," is taking a heavy toll on chip stocks (SOXX -5.5%).
    • Intel (INTC -4.2%) and many other chipmakers have joined the several firms that sold off AH yesterday in going in the same direction as Microchip: MU -5.8%. FSL -8.5%. BRCM -3.6%. SWKS -7.5%. RFMD -6.2%. XLNX -4.9%. MXIM -5%. AMBA -5.5%. IDTI -6.7%. CAVM -7.4%. AVGO -10.2%. SMTC -4.3%. SYNA -4.1%. POWI -6.9%.
    • Chip equipment makers are also getting hit: AMAT -3.5%. KLAC -3.3%. LRCX -2.3%. UTEK -2.5%. KLIC -2%.
    • As Microchip noted in yesterday's warning, the company's very diversified customer base, together with its recognition of distributor revenue on a customer sell-through basis rather than a distributor sell-in basis, often allow it to see industry changes before peers.
    • The microcontroller vendor added its warning was driven by a September decline in sales to Chinese clients, and observed it has typically "returned to sequential revenue growth after two quarters" during past downturns.
    • Chip stocks have had a good run over the last 12 months, aided by healthy mobile demand and the industry's consolidation wave.
  • Oct. 10, 2014, 9:07 AM
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  • Oct. 9, 2014, 4:37 PM
    • Microchip (NASDAQ:MCHP) expects FQ2 revenue of $546.2M, below prior guidance of $560M-$575.9M and a $567.9M consensus.
    • CEO Steve Sanghi: "The month of September is usually a strong month for our revenue after the summer holiday period. This time, the September sales did not materialize to our expectations. The revenue miss was led by China where the September quarter is traditionally the strongest."
    • Sanghi also highlights Microchip's status as a bellwether for the chip industry, due to its 80K+ customers and recognition of distributor revenue based on sell-through to customers rather than distributor sell-in. "We believe that another industry correction has begun and that this correction will be seen more broadly across the industry in the near future."
    • MCHP -8.1% AH.
  • Aug. 28, 2014, 6:20 PM
    • Microchip (MCHP +0.8%) confirms it has held talks with CSR (CSRE +35.3%) about "ways in which [Microchip's] relationship with CSR could be advanced, including possibly an acquisition of CSR." However, the talks are said to be "at a very preliminary stage."
    • Microchip, whose microcontrollers are sometimes found within products that also contain CSR's Bluetooth, GPS, or A/V chips, notes it has partnered with CSR in the past, with a Bluetooth module initiative being one example.
    • Back in May, Microchip announced it's buying Taiwanese Bluetooth chipmaker ISSC for $294.3M. The company has also snapped up analog chipmaker Supertex, as it takes part in a broader chip industry M&A wave.
    • Earlier: CSR turns down Microchip's buyout offer
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  • Jan. 30, 2014, 7:04 PM
    • Broadcom (BRCM) expects Q1 revenue of $1.9B-$2B vs. a $1.97B consensus. Gross margin is expected to drop 50-100 bps Q/Q. Shares +2.2% AH; expectations were depressed following Apple and Samsung's earnings/guidance. (Q4 results, PR)
    • NetSuite (N) expects Q1 revenue of $119M-$121M and EPS of $0.01-$0.02 vs. a consensus of $119.7M and $0.06. The company expects 2014 revenue of $535M-$540M and EPS of $0.24-$0.26 vs. a consensus of $532.9M and $0.28. Shares +2.5% AH. (Q4 results, PR)
    • Computer Sciences (CSC) now expects FY14 (ends in March) EPS from continuing ops of $3.80-$3.90, above prior guidance of $3.50-$3.70 and a $3.68 consensus. Shares +1.5% AH. (FQ3 results, PR)
    • Microchip (MCHP) expects FQ4 revenue of $482.4M-$496.8M and EPS of $0.59-$0.63 vs. a consensus of $488.4M and $0.62. Shares -4.1% AH. (FQ3 results, PR)
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  • Nov. 18, 2013, 9:40 AM
    • MercadoLibre (MELI -1.6%) has been cut to Underweight by Morgan Stanley, which cites Venezuela-related concerns. The company's forex accounting for Venezuela, which has seen massive inflation, has been sharply criticized. Shares were hammered two weeks ago following a Q3 miss.
    • Ikanos (IKAN +10.2%) and Radware (RDWR +5.5%) have been upgraded to Buy by Needham.
    • Maxim (MXIM +0.8%) has been upgraded to Buy by MKM.
    • Synchronoss (SNCR -1.6%) has been cut to Neutral by Baird.
    • Microchip (MCHP -1%) has been cut to Equal Weight by Stephens.
    • ON Semi (ONNN -1.8%) has been cut to Neutral by MKM.
    • Overland Storage (OVRL) has been started at Hold by Needham a few days after delivering mixed FQ1 results.
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  • Oct. 31, 2013, 5:58 PM
    • Market-pleasing Q3 reports and better-than-feared guidance from Atmel (ATML +10.6%), Intersil (ISIL +4.2%), International Rectifier (IRF +11.4%), Microchip (MCHP +7.5%), Cavium (CAVM +8.9%), and Skyworks (previous) helped chip stocks trader higher (SOXX +0.6%) on a down day for tech
    • The gains followed a difficult month that saw many chipmakers (including a number with strong mobile exposure) provide disappointing Q4 guidance. While the guidance provided by the aforementioned companies wasn't stellar, it was better than feared in light of recent forecasts.
    • Atmel guided on its CC (transcript) for Q4 revenue of $350M-$364M, below a $364.9M consensus.
    • Intersil expects Q4 revenue of $142M-$148M and EPS of $0.16-$0.18 vs. a consensus of $149.1M and $0.17.
    • Microchip, viewed by some as an industry bellwether, was able to deliver in-line guidance: the company expects FQ3 revenue of $463.1M-$492.7M and EPS of $0.57-$0.63 vs. a consensus of $476.9M and $0.59.
    • International Rectifier expects FQ2 revenue of $260M-$270M vs. a $265M.1M consensus.
    • Cavium guided on its CC (transcript) for 1%-4% Q/Q revenue growth and EPS of $0.29-$0.31; the consensus is for 5% growth and EPS of $0.30.
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  • Oct. 31, 2013, 9:59 AM
    • Atmel (ATML +9.1%) has been upgraded to Outperform by Wedbush after beating Q3 revenue estimates and adding $300M to its buyback plan.
    • Microchip (MCHP +5.8%) has been upgraded to Buy by Mizuho in the wake of its FQ2 beat.
    • Cavium (CAVM +6.5%) has been upgraded to Outperform by Oppenheimer following its Q3 beat.
    • Arris (ARRS +2.7%) has been upgraded to Overweight by Stephens after beating Q3 estimates and issuing solid guidance.
    • UMC (UMC -1.9%) has been cut to Neutral by BofA a day after posting its Q3 report.
    • MTS (MBT -2%) has been cut to Neutral by Citi, and to Sell by UBS.
    • Jabil (JBL -0.9%) has been cut to Buy from Strong Buy by Needham.
    • Itron (ITRI -5.6%) has been cut to Neutral by Janney, and upgraded to Hold by Brean, following its Q3 miss.
    • Garmin (GRMN -4.2%) has been cut to Sector Perform by Raymond James a day after posting its Q3 results.
    • MagnaChip (MX -1.2%) has been cut to Neutral by UBS two days after delivering mixed Q3 results.
    • Digital Realty (DLR -2.2%) has been cut to Hold by Stifel two days after providing soft guidance. Raymond James downgraded shares yesterday.
    • Carbonite (CARB -9.1%) has been cut to Sector Perform by Pac Crest after providing below-consensus revenue guidance to go with a Q3 beat.
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  • Sep. 24, 2013, 10:11 AM
    • Red Hat (RHT -12.3%) has been cut to neutral ratings by Piper and Pac Crest in the wake of its disappointing FQ2 billings data and mixed guidance.
    • Storage giants EMC (EMC -1.7%) and NetApp (NTAP -1.2%) have been cut to Equal Weight by Barclays.
    • F5 (FFIV -2.4%) has been cut to Neutral by Goldman.
    • Rovi (ROVI +2.5%) has been upgraded to Buy by B. Riley.
    • Microchip (MCHP +0.7%) has been upgraded to Buy by Goldman.
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  • Aug. 16, 2013, 9:39 AM
    • Applied Materials (AMAT +2.1%) has been upgraded to Buy by D.A. Davidson following its FQ3 miss, light FQ4 guidance, and CEO announcement.
    • Morgan Stanley is overhauling its chip stock coverage. Maxim (MXIM -0.4%) has been cut to Equal Weight a day after announcing the Volterra acquisition, and largely getting good reviews for it. Meanwhile, Linear (LLTC +0.6%) and Xilinx (XLNX +1.3%) have been upgraded to Overweight.
    • In addition, MS has started ON Semi (ONNN +0.4%) and Freescale at Underweight, Atmel (ATML +1.7%) and Fairchild (FCS +0.9%) at Overweight, and Microchip (MCHP +0.5%) at Equal Weight.
    • RBC has started another analog chipmaker, Semtech (SMTC +1.6%), at Outperform ahead of its Aug. 21 FQ2 report.
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Company Description
Microchip Technology Inc develops, manufactures and sells semiconductor products used for a variety of embedded control applications. It also provides license Flash-IP solutions that are incorporated in a range of products.