Microchip Technology (MCHP) Narrows Financial Guidance for Q2

Microchip Technology Incorporated (NASDAQ: MCHP), a leading provider of smart, connected and secure embedded control solutions, today narrowed the range of its prior guidance for net sales and GAAP and non-GAAP earnings per share for its fiscal second quarter of 2021 ending September 30, 2020. Microchip previously provided guidance on August 4, 2020 for consolidated net sales to be flat to down 8% sequentially, with a midpoint of down 4%. Microchip now expects consolidated net sales for the September quarter to be down between 2% and 6% sequentially with an unchanged mid-point of down 4%. GAAP earnings per share is now expected to be between $0.23 and $0.31 and non-GAAP earnings per share is expected to be between $1.36 and $1.46. The original guidance provided on August 4, 2020 for GAAP earnings per share was $0.17 to $0.37 and the original guidance for non-GAAP earning per share was between $1.30 and $1.52. We are not able to estimate the amount of “Special Charges and Other Expense” or the amount of any gain or loss on our recently completed debt retirement and convertible debt exchange transactions, and therefore our estimate of GAAP earnings per share excludes any such amounts.

(*Consensus sees EPS of $1.43)

“The September 2020 quarter is tracking in line with our original expectations, allowing us to narrow our net sales and diluted earnings per share guidance after completing the first two months of the quarter,” said Steve Sanghi, Microchip’s CEO. “Our bookings activity has been strong in July and August allowing us to fill in the September quarter from a low backlog at the start of the quarter.”

Mr. Sanghi continued, “From an end market perspective, we are seeing the end markets of data center and computing that benefited from “work from home” in the June 2020 quarter weaken in the current quarter. We are also seeing the automotive and industrial end markets that were weak in the June 2020 quarter start to recover in the current quarter.”

There will be no conference call associated with this press release. Microchip is presenting at the Citi 2020 Global Technology Conference on Wednesday, September 9 at 5:10PM (Eastern). A live webcast and replay of this presentation will be available at www.microchip.com/investors.

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