Microchip Technology Narrows Financial Guidance for Fourth Quarter Fiscal 2019
March 05 2019 - 4:15PM
(NASDAQ: MCHP) – Microchip Technology Incorporated, a leading broad
line semiconductor supplier 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 fourth quarter of 2019 ending March 31, 2019.
Microchip previously provided guidance on February 5, 2019
for consolidated net sales to be $1.251 billion to $1.403 billion
or down 9% to up 2% sequentially, with a midpoint of down
3.5%. Microchip now expects consolidated net sales for the
March quarter to be $1.279 billion to $1.375 billion, or flat to
down 7% sequentially with an unchanged mid-point of down
3.5%. GAAP earnings per share is now expected to be between
$0.21 and $0.38 and non-GAAP earnings per share is expected to be
between $1.30 and $1.49. The original guidance for GAAP
earnings per share was $0.18 to $0.41 and the original guidance for
non-GAAP earning per share was between $1.26 and $1.53. We
are not able to predict whether inventory at our distributors will
increase or decrease and are therefore providing a relatively broad
range of revenue guidance. We continue to manage our business
internally based on end-market demand. Consistent with our
February 5, 2019 guidance, we are not able to estimate the amount
of Special Charges and Other, and therefore our estimate of GAAP
earnings per share excludes any such amounts.
“The March 2019 quarter is tracking towards our original
guidance provided on February 5, 2019,” said Steve Sanghi,
Microchip’s CEO. “We are narrowing the range of our net sales
and earnings per share guidance around the previously provided
mid-point. Based on the latest information available to us
and our discussions with our distributors and customers, we
reconfirm our belief that barring any negative developments in the
trade relations between the U.S. and China that the March 2019
quarter will mark the bottom of the current cycle for
Microchip.”
There will be no conference call associated with this press
release.
Cautionary Statement:
The statements in this release relating to expecting
consolidated net sales for the March quarter to be $1.279 billion
to $1.375 billion, or flat to down 7% sequentially with an
unchanged mid-point of down 3.5%, GAAP earnings per share expected
to be between $0.21 and $0.38 and non-GAAP earnings per share is
expected to be between $1.30 and $1.49, continuing to manage our
business internally based on end-market demand, not being able to
estimate the amount of Special Charges and Other, the March 2019
quarter tracking towards our original guidance, and our belief that
barring any negative developments in the trade relations between
the U.S. and China that the March 2019 quarter will mark the bottom
of the current cycle for Microchip are forward-looking statements
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These statements
involve risks and uncertainties that could cause our actual results
to differ materially, including, but not limited to: any economic
uncertainty due to monetary or trade policy, political or other
issues in the U.S. or internationally, any unexpected fluctuations
or weakness in the U.S. and global economies (including China),
changes in demand or market acceptance of our products and the
products of our customers; our ability to successfully integrate
the operations and employees, retain key employees and customers
and otherwise realize the expected synergies and benefits of our
acquisitions (including our acquisition of Microsemi Corporation);
the impact of current and future changes in U.S. corporate tax laws
(including the Tax Cuts and Jobs Act of 2017), foreign currency
effects on our business; the mix of inventory we hold and our
ability to satisfy short-term orders from our inventory; changes in
the level of inventory held by our distributors, changes in
utilization of our manufacturing capacity and our ability to
effectively manage and expand our production levels; competitive
developments including pricing pressures; the level of orders that
are received and can be shipped in a quarter; changes or
fluctuations in customer order patterns and seasonality; the impact
of any future significant acquisitions that we may make; our
ability to obtain a sufficient supply of wafers from third party
wafer foundries and the cost of such wafers, the costs and outcome
of any current or future litigation or other matters involving our
Microsemi acquisition, the Microsemi business, intellectual
property, customers, or other issues; the costs and outcome of any
current or future tax audit or investigation regarding our business
or the business of Microsemi, our actual average stock price in the
March 2019 quarter and the impact such price will have on our share
count; fluctuations in our stock price and trading volume which
could impact the number of shares we acquire under our share
repurchase program and the timing of such repurchases; disruptions
in our business or the businesses of our customers or suppliers due
to natural disasters (including any floods in Thailand), terrorist
activity, armed conflict, war, worldwide oil prices and supply,
public health concerns or disruptions in the transportation system;
and general economic, industry or political conditions in the
United States or internationally.
For a detailed discussion of these and other risk factors,
please refer to Microchip's filings on Forms 10-K and 10‑Q.
You can obtain copies of Forms 10-K and 10-Q and other relevant
documents for free at Microchip's website (www.microchip.com) or
the SEC's website (www.sec.gov) or from commercial document
retrieval services.
Stockholders of Microchip are cautioned not to place undue
reliance on our forward-looking statements, which speak only as of
the date such statements are made. Microchip does not
undertake any obligation to publicly update any forward-looking
statements to reflect events, circumstances or new information
after this March 1, 2019 press release, or to reflect the
occurrence of unanticipated events.
About Microchip:
Microchip Technology Incorporated is a leading broad line
semiconductor supplier of smart, connected and secure embedded
control solutions, providing low-risk product development, lower
total system cost and faster time to market for thousands of
diverse customer applications worldwide. Headquartered in
Chandler, Arizona, Microchip offers outstanding technical support
along with dependable delivery and quality. For more
information, visit the Microchip website at www.microchip.com.
Note: The Microchip name and logo are registered
trademarks of Microchip Technology Inc. in the USA and other
countries.
INVESTOR RELATIONS CONTACT:J. Eric Bjornholt –
CFO(480) 792-7804
Microchip Technology (NASDAQ:MCHP)
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