SAN FRANCISCO—Chip vendor Microchip Technology Inc. Thursday (Feb. 8) reported its highest ever quarterly sales. The company exceeded Wall Street’s expectations for both sales and profit in its fiscal third quarter, which closed last month.
“We were pleased with our execution in the December quarter despite a very challenging macroeconomic environment,” said Steve Sanghi, Microchip’s president and CEO, in a statement. Sanghi said the company’s sales, gross margin, operating expenses and earnings per share were all better than the mid-point of the range the company guided for in November.
Microchip (Chandler, Ariz.) reported sales of $416 million, up 9 percent from the previous quarter and up 26 percent from the year-ago quarter. The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $10.2 million, compared to a net loss of $21.2 million in the previous quarter and down from a GAAP net income of $77.5 million in the year-ago quarter.
Microchip’s sales for the quarter came in ahead of consensus analysts’ expectations, according to Yahoo Finance.
Sanghi said Microchip’s microcontroller sales improved by 2 percent compared with the previous quarter, reaching $266 million. During the quarter, the company achieved all-time highs in sales of both 16- and 32-bit microcontrollers, which grew sequentially by 13 and 17 percent, respectively, Sanghi said.
“We made good progress in reducing our inventory position in the December quarter,” said Eric Bjornholt, Microchip’s chief financial officer. “The actions that we implemented to reduce factory output in the December quarter are bringing inventory levels down and we expect to make further progress in the March quarter.”
For the current quarter, Microchip said it expects sales to be between $420.2 million and $432.7 million, above consensus analysts’ estimates.
Sanghi noted that the current quarter, Microchip’s fiscal fourth quarter, typically includes seasonal effects associated with the Chinese New Year celebration. “However, we are starting to see exceptionally strong bookings and expedite activity in our business driven by solid demand and a robust design win pipeline,” Sanghi said. “We believe the December quarter was the bottom of this cycle for Microchip, and we expect our total net sales in the March quarter to be up between one and four percent sequentially.”