BREAKING: Stocks Climb As Fed Questions Rate-Hike Pace
Microchip Technology (MCHP) shares rose Tuesday after the chipmaker beat Wall Street’s targets for the March quarter and guided higher for the June quarter. MCHP stock jumped over 6% on the news.
The Chandler, Ariz.-based company late Monday said it earned an adjusted $1.35 a share on sales of $1.84 billion in its fiscal fourth quarter ended March 31. Analysts polled by FactSet expected Microchip earnings of $1.25 a share on sales of $1.82 billion. On a year-over-year basis, Microchip earnings jumped 45% while sales increased 26%.
For the current quarter, Microchip forecast adjusted earnings of $1.34 a share on sales of $1.96 billion. That’s based on the midpoint of its guidance. Wall Street had predicted earnings of $1.28 a share on sales of $1.86 billion in the June quarter.
Also, Microchip raised its quarterly cash dividend 9.1% to 27.6 cents per share.
On the stock market today, MCHP stock climbed 6.1% to close at 68.25. During the regular session Monday, MCHP stock fell 4.8% to 64.31 during a big sell-off for stocks overall.
In a news release, Chief Executive Ganesh Moorthy said business conditions were very strong in the March quarter with demand outpacing supply.
“Based on the magnitude of the demand-supply imbalance, the size of our non-cancellable backlog, the rate at which new backlog continues to come in, and the pace at which we can bring new capacity online, we expect to remain supply-constrained throughout 2022 and into 2023,” he said.
Covid-related lockdowns in China have added to the challenging supply environment, Moorthy said.
Microchip makes control chips for industrial, automotive, consumer, communications, computing, and aerospace and defense markets.
MCHP stock ranks fifth out of 44 stocks in IBD’s semiconductor manufacturing industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 87 out of 99. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.
At least 12 Wall Street analysts cut their price targets on MCHP stock after Microchip’s earnings report. They cited lower valuations for semiconductor stocks as the sector remains out of favor with investors.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
YOU MAY ALSO LIKE:
Chipmaker Earnings Reports Mostly Positive But Investors Apathetic
Alpha & Omega Semiconductor Beats March-Quarter Targets, But Sales Outlook Lags
Chipmaker SiTime Continues Earnings Hot Streak In First Quarter
Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists
Join IBD Live For Stock Ideas Each Morning Before The Open
10/05/2022 Microchip Technology shows rising price performance, earning an upgrade to its IBD Relative Strength Rating from 78 to 85.
10/05/2022 Microchip Technology shows rising price performance, earning an upgrade to…
Thanks to the work of companies using a technique known as CRISPR gene editing, quick and permanent cures may be found for a host of illnesses. (© Chris Gash)
Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20!
Get market updates, educational videos, webinars, and stock analysis.
Learn how you can make more money with IBD’s investing tools, top-performing stock lists, and educational content.
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.
*Real-time prices by Nasdaq Last Sale. Realtime quote and/or trade prices are not sourced from all markets.
Ownership data provided by Refinitiv and Estimates data provided by FactSet.
© 2000-2022 Investor’s Business Daily, LLC. All rights reserved