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Microchip Technology Q4 Adj Net Beats View; Will Acquire Standard Microsystems for $829 Million (MCHP)

By Dividend.com,  May 02, 2012, 08:59:21 AM EDT

Semiconductor maker Microchip Technology Inc. ( MCHP ) late Tuesday posted adjusted fiscal fourth quarter earnings that beat Wall Street's view, then on Wednesday morning said it would acquire Standard Microsystems Corp for $829 million.

The Chandler, AZ-based company reported fiscal fourth quarter net income of $80.6 million, or 39 cents per share, compared with $125.5 million, or 62 cents per share, in the year-ago period. Excluding special items, adjusted profit was 46 cents per share.

Revenue fell 10% from last year to $338.9 million.

On average, Wall Street analysts expected a smaller profit of 45 cents per share, albeit on slightly higher revenue of $340.82 million.

Buying Standard Microsystems
In a separate announcement on Wednesday, Microchip Technology said it will buy fellow semiconductor maker Standard Microsystems ( SMSC ) for $829.2 million in cash.

The $37 per-share offer for SMSC represents a 41% premium over the stock's Tuesday closing price of $26.24. The companies noted they expect the deal to close in the third quarter of 2012.

Microchip Technology shares were inactive in premarket trading Wednesday.

The Bottom Line
Shares of Microchip Technology ( MCHP ) have a 3.97% dividend yield, based on last night's closing stock price of $35.23. The stock has technical support in the $32 price area. If the shares can firm up, we see overhead resistance around the $38-$39 price levels.

Microchip Technology Inc. ( MCHP ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, Stocks

Referenced Stocks: MCHP, SMSC



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