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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