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CHANDLER, Ariz. - Microchip Technology Inc . (NASDAQ:MCHP) reported better-than-expected fourth quarter results and issued upbeat guidance, sending its shares up 5.7% in after-hours trading.
The semiconductor company posted adjusted earnings of $0.11 per share for the quarter ended March 31, 2025, beating analyst estimates of $0.10. Revenue came in at $970.5 million, surpassing expectations of $962.76 million.
While Q4 revenue declined 26.8% YoY, it exceeded the midpoint of the company’s previous guidance. Microchip believes the quarter marks "the bottom of this prolonged industry down cycle" for the company.
Looking ahead, Microchip forecast Q1 fiscal 2026 revenue between $1.02 billion and $1.07 billion, well above the $984 million consensus. The company expects adjusted EPS of $0.18 to $0.26, also ahead of the $0.15 analyst estimate.
"We have clearly reached an inflection point," said CEO Steve Sanghi, noting that April bookings were higher than any month in the March quarter. He added that Microchip achieved its first positive book-to-bill ratio in nearly three years.
The company’s inventory reduction strategy showed progress, with overall inventory down $62.8 million in Q4. Microchip expects "even more substantial inventory reduction" in the current quarter.
While expressing optimism about growth opportunities, management remains cautious about geopolitical concerns and potential tariff impacts as market conditions evolve.
Microchip declared a quarterly dividend of 45.5 cents per share, payable on June 5, 2025 to shareholders of record on May 22, 2025.
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