Microchip Technology Inc
) reported GAAP net income of $10.2 million or 5 cents per share
in third quarter of fiscal 2013, down from $77.5 million or 38
cents per share in the year-ago quarter. The decrease in GAAP
earnings was due to higher expenses related to acquisition
activities. Adjusted net income for third quarter was $84.5
million or 41 cents per share versus $85.4 million or 42 cents
per share in the year-earlier quarter. The quarterly adjusted
earnings beat the Zacks Consensus Estimate of 32 cents.
Microchip generated GAAP net revenue of $416.0 million in third
quarter 2013, up 26.4% year over year, aided by a healthy
microcontroller business. The quarterly revenues beat the Zacks
Consensus Estimate of $413 million.
In terms of product mix, net sales of microcontroller products
were up 1.8% sequentially to $266 million, driven by robust sales
of16-bit and 32-bit microcontrollers. While 16-bit
microcontroller business surged 12.6% sequentially, 32-bit
microcontroller revenues were up 17.4% sequentially, driven by
new design wins and applications.
Analog revenues grew 7.7% sequentially in the third quarter.
Memory business was down 11.2% on a sequential basis.
Excluding stock-based compensation expense and one-time items,
gross margin stood at 56.0% versus 56.8% in the year-ago quarter.
Operating margin came in at 25.4% versus 30.5% in the year-ago
The company incurred approximately $9.9 million in capital
expenditures. As of Dec, 2012, cash and short-term investments
came in at $1.6 billion compared with $1.5 billion at the end of
Concurrent with the third quarter earnings release, management
provided guidance for the fourth quarter of fiscal 2013.
Management expects GAAP net sales between $420.2 million and
$432.7 million while adjusted gross margin is expected to be in
the range of 55.75% to 56.25%. Adjusted EPS is expected in the
range of 45 cents-49 cents and GAAP EPS in the range of 18 to 21
cents. The company expects net cash generation of approximately
$110 million to $130 million in the fourth quarter. The company
expects to incur $24 million in capital expenditure in the next
quarter, bringing its tally to about $60 million for fiscal 2013.
Microchip believes that the seasonality related to the Chinese
New Year in the upcoming quarter will lead to strong bookings and
robust business activities.
However, the company needs to be wary of intense competition from
industry bigwigs, which include formidable names as
MagnaChip Semiconductor Corporation
NXP Semiconductors NV.
ON Semiconductor Corp.
), all carrying Zacks Rank #2 (Buy). Microchip also carries a
Zacks Rank #2 (Buy).
MICROCHIP TECH (MCHP): Free Stock Analysis
MAGNACHIP SEMI (MX): Free Stock Analysis
NXP SEMICONDUCT (NXPI): Free Stock Analysis
ON SEMICON CORP (ONNN): Free Stock Analysis
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