Microchip (MCHP) to Report Q4 Earnings: What's in the Cards?

Microchip Technology MCHP is set to release its fourth-quarter fiscal 2024 results on May 6.

Microchip expects net sales to be $1.225-$1.425 billion for the fourth quarter of fiscal 2024. Non-GAAP earnings are anticipated between 46 cents per share and 68 cents per share.

The Zacks Consensus Estimate for fiscal fourth-quarter earnings is currently pegged at 57 cents per share, unchanged over the past 30 days and suggesting a 65.24% year-over-year decline.

The consensus estimate for revenues is pegged at $1.33 billion, suggesting a decline of 40.57% year over year.
 

Microchip Technology Incorporated Price and EPS Surprise

Microchip Technology Incorporated Price and EPS Surprise

Microchip Technology Incorporated price-eps-surprise | Microchip Technology Incorporated Quote

 

Microchip’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and were in line in the remaining two, delivering an earnings surprise of 0.78%, on average.

Let’s see how things have shaped up for the company prior to this announcement:

Factors to Note

Microchip has been suffering from a slowdown in business due to increasing uncertainty, slowing economic activity and an increase in inventory level with customers. Persistent inflation and high-interest rates have been detrimental to the company’s prospects.

Despite these challenges, Microchip’s consistent strength in its analog and mixed-signal microcontroller businesses is expected to have contributed well in the to-be-reported quarter.

MCHP's robust portfolio of its 8, 16, and 32-bit microcontrollers and its widespread adoption is expected to have bolstered MCHP's performance in the fiscal fourth quarter.

Expanding Portfolio Aids Prospect

Microchip significantly expanded its portfolio in the to-be-reported quarter.

MCHP announced its next generation of LAN969x Ethernet switches with Time Sensitive Networking, scalable bandwidths from 46 Gbps to 102 Gbps and a powerful 1 GHz single-core Arm Cortex-A53 CPU.

It launched the MCP998x family of 10 automotive-qualified remote temperature sensors. The MCP998x family is one of the largest portfolios of automotive-grade multi-channel temperature sensors in the industry and is designed for 1°C accuracy at a wide operational temperature range.

Microchip launched the PolarFire SoC Discovery Kit, featuring a quad-core RISC-V processor, 95K FPGA logic elements and a user-friendly design, addressing the demand for open-source RISC-V-based processor architectures and promoting accessibility to emerging technology for engineers at all levels.

It introduced the 3.3 kV XIFM plug-and-play mSiC gate driver, featuring Augmented Switching technology for rapid implementation of Silicon Carbide (SiC) solutions in medium-to-high-voltage applications, streamlining system integration with preconfigured settings and reducing design cycle time by up to 50%.

Moreover, Microchip introduced the 3.3 kV XIFM plug-and-play mSiC gate driver, featuring Augmented Switching technology for rapid implementation of SiC solutions in medium-to-high-voltage applications, streamlining system integration with preconfigured settings and reducing design cycle time by up to 50%.

Microchip launched a family of dsPIC Digital Signal Controller-based integrated motor drivers for efficient, real-time embedded motor control systems. These drivers feature reduced component count, smaller PCB dimensions, and high CPU performance up to 100 MHz.

Microchip announced the expansion of its Serial SRAM product line, offering larger densities of up to 4 Mb and increased SPI/SQI speed to 143 MHz, providing a cost-effective, low-pin-count solution for high-performance applications.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Microchip has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Arista Networks ANET has an Earnings ESP of +2.49% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks’ shares have gained 8.9% year to date. ANET is set to report its first-quarter 2024 results on May 7.

Bumble BMBL has an Earnings ESP of +54.00% and a Zacks Rank #2.

Bumble’s shares have declined 31.5% year to date. BMBL is scheduled to release first-quarter 2024 results on May 8.

Silicon Motion Technology SIMO has an Earnings ESP of +5.96% and a Zacks Rank #2.

Silicon Motion’s shares have gained 20.5% year to date. SIMO is scheduled to release first-quarter 2024 results on May 2.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report

Silicon Motion Technology Corporation (SIMO) : Free Stock Analysis Report

Arista Networks, Inc. (ANET) : Free Stock Analysis Report

Bumble Inc. (BMBL) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for the TradeTalks newsletter to receive your weekly dose of trading news, trends and education. Delivered Wednesdays.