Microchip Technology Incorporated
(
MCHP
) posted a net income of $78.7 million in the first quarter of 2013
(ending June 30, 2012), down 2.4% sequentially and 20.7% from the
year-ago quarter. Earnings per share came in at 39 cents per share,
in line with the previous quarter but lower than 49 cents in the
year-ago quarter.
Excluding one-time items, net income came in at 43 cents during
the quarter, missing the Zacks Consensus Estimate by a penny.
Microchip generated net revenues of $352.1 million, up 3.9%
sequentially but down 6.0% from the year-ago
quarter. Including sell-through inventory held by distributors
of Roving Networks, net sales of $352.4 million were $0.3 million
higher than the reported figure of $352.1 million in the first
quarter. This was also up 4.0% sequentially but down 5.9% year over
year.
Quarter in Detail
In terms of product mix, revenues from microcontrollers were up
5.1% sequentially with growth in 8-bit, 16-bit and 32-bit
businesses. The 16-bit business was up 23.7% sequentially and 18.9%
from the year-ago quarter. 32-bit business also recovered and
surged 71.5% sequentially.
Management stated that both the 16-bit and 32-bit
microcontroller business benefited from the increased demand as
customers either commenced production or ramped up their
volumes.
Analog business was up 9% sequentially. The company shipped
47,000 tools in the June quarter.
Memory business, comprising Serial E-squared memory products and
SuperFlash memory products, were down 2.4% sequentially.
Despite a strong start to the quarter, the company's business
was negatively impacted by weak Europe and a slowdown in
China.
Excluding stock-based compensation expense and one-time items,
gross margins came in at 59% versus 58.1% in the previous quarter
and 59.5% in the year-ago quarter.
Operating margin came in at 32.7%, up from 31.9% in the previous
quarter but down from 34.5% in the previous quarter.
Including the above-mentioned items, Microchip generated a gross
margin of 57.7% compared with 57.2% in the previous
quarter.
The company generated cash from operating activities of $101.4
million and incurred approximately $10 million in capital
expenditures. Microchip ended the quarter with cash and cash
equivalents of $1.6 billion, up from $1.4 billion at the end of the
previous quarter. Inventory came in at $221.5 million, up from
$217.3 million at the end of the previous quarter.
Outlook
Management expects net sales between $412 million and $430
million in the second quarter of fiscal 2013, up 17% - 22%
sequentially. This includes a contribution of about $65 million to
$70 million from Standard MicroSystems Corporation (SMSC)
products.
On August 2, 2012, Microchip acquired SMSC in order to expand
its smart mixed-signal connectivity solutions for embedded
applications in markets such as automotive, industrial, computing,
consumer and wireless audio. The integration process is underway
and management expects the acquisition to be accretive to the
bottom-line in the September quarter.
For the second quarter of fiscal 2013, Gross margin is expected
to come between 58.5% and 59.0%. EPS is forecasted between 50 cents
and 52 cents.
Microchip Technology Incorporated (MCHP) posted a net income of
$78.7 million in the first quarter of 2013 (ending June 30, 2012),
down 2.4% sequentially and 20.7% from the year-ago quarter.
Earnings per share came in at 39 cents per share, in line with the
previous quarter but lower than 49 cents in the year-ago
quarter.
Excluding one-time items, net income came in at 43 cents during
the quarter, missing the Zacks Consensus Estimate by a penny.
Microchip generated net revenues of $352.1 million, up 3.9%
sequentially but down 6.0% from the year-ago quarter.
Including sell-through inventory held by distributors of Roving
Networks, net sales of $352.4 million were $0.3 million higher than
the reported figure of $352.1 million. This was also up 4.0%
sequentially but down 5.9% year over year.
Quarter in Detail
In terms of product mix, revenues from microcontrollers were up
5.1% sequentially with growth in 8-bit, 16-bit and 32-bit
businesses. The 16-bit business was up 23.7% sequentially and 18.9%
from the year-ago quarter. 32-bit business also recovered and
surged 71.5% sequentially.
Management stated that both the 16-bit and 32-bit
microcontroller business benefited from the increased demand as
customers either commenced production or ramped up their
volumes.
Analog business was up 9% sequentially. The company shipped
47,000 tools in the June quarter.
Memory business, comprising Serial E-squared memory products and
SuperFlash memory products, were down 2.4% sequentially.
Despite a strong start to the quarter, the company's business
was negatively impacted by weak Europe and a slowdown in
China.
Excluding stock-based compensation expense and one-time items,
gross margins came in at 59% versus 58.1% in the previous quarter
and 59.5% in the year-ago quarter.
Operating margin came in at 32.7%, up from 31.9% in the previous
quarter but down from 34.5% in the previous quarter.
Including the above-mentioned items, Microchip generated a gross
margin of 57.7% compared with 57.2% in the previous
quarter.
The company generated cash from operating activities of $101.4
million and incurred approximately $10 million in capital
expenditures. Microchip ended the quarter with cash and cash
equivalents of $1.6 billion, up from $1.4 billion at the end of the
previous quarter. Inventory came in at $221.5 million, up from
$217.3 million at the end of the previous quarter.
Outlook
Management expects net sales between $412 million and $430
million in the second quarter of fiscal 2013, up 17% - 22%
sequentially. This includes a contribution of about $65 million to
$70 million from Standard MicroSystems Corporation (SMSC)
products.
On August 2, 2012, Microchip acquired SMSC in order to expand
its smart mixed-signal connectivity solutions for embedded
applications in markets such as automotive, industrial, computing,
consumer and wireless audio. The integration process is underway
and management expects the acquisition to be accretive to the
bottom-line in the September quarter.
For the second quarter of fiscal 2013, Gross margin is expected
to come between 58.5% and 59.0%. EPS is forecasted between 50 cents
and 52 cents.
The results did not have much of an impact on the stock price as
it was marginally up at 0.30% in after-hours trading to close at
$33.50.
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