Earnings Preview: Microchip Technology

| About: Microchip Technology (MCHP)

Microchip Technology (NASDAQ:MCHP) is expected to report Q1 earnings Thursday, July 24 after market close with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 40c for EPS and $270.32M for revenue, according to First Call.

Analyst Views

Morgan Keegan believes Microchip is likely to report June quarter results that are in-line with Street expectations, which is in-line with management's previous expectations. Morgan Keegan is incrementally more confident given that the company's CEO reiterated guidance for the June quarter at an investor conference late in the quarter.

Thomas Weisel expects Microchip to report revenue at the mid-point of the up 2% to 6% guidance, slightly below seasonality, in-line with its and the consensus estimate. The firm believes Microchip may be seeing a bottoming of revenue weakness related to broad-based Industrial/US Housing. Looking forward: For Q2, Weisel's estimates are $277.3M, up 2.4% QoQ and GAAP EPS of 40c, compared with consensus at $278.4M and GAAP EPS of 42c. Weisel remains slightly cautious due to inventory levels with days of inventory still at a 2.5-year high entering the June quarter. Weisel also expects the company during this weak environment will maintain profitability and may be viewed as a safe harbor for investors believing the economic slow down in the US and Western Europe will eventually affect slow growth in other economies. However, that is not Weisel's our view and would prefer other higher growth semiconductor companies over Microchip at this time. Weisel rates the shares Market Weight.

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Tagged: , Semiconductor - Specialized, Earnings
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