Microchip EPS Soars 120% to $0.44, Raises Q4 Sales Outlook to $1.26B
Microchip reported non-GAAP Q3 earnings of $0.44 per share, up 120% year-over-year and beating estimates by 3.4%, on net sales of $1.19 billion, a 15.6% increase that topped consensus by 0.1%. Gross margin expanded 510 basis points to 60.5%, while operating cash flow rose to $341.4 million, and Q4 sales are guided to $1.26 billion.
1. Q3 Financial Results
Microchip posted non-GAAP earnings of $0.44 per share for fiscal Q3, surpassing estimates by 3.38% and up from $0.20 a year ago. Revenue climbed 15.6% year-over-year to $1.19 billion, beating consensus by 0.08% and marking a 4% sequential rise.
2. Segment Performance and Margins
Mixed‐signal microcontrollers contributed 49.5% of net sales, analog 27.2% and other products 23.3%, with microcontroller and analog revenues flat sequentially. Non-GAAP gross margin widened by 510 basis points to 60.5% and non-GAAP operating margin jumped to 28.5%, up from 20.5% last year.
3. Balance Sheet and Cash Flow
Cash and equivalents increased to $250.7 million while net debt remained around $5.37 billion. Operating cash flow reached $341.4 million, up from $271.5 million sequentially, and free cash flow totaled $318.9 million with $246.5 million returned to shareholders via dividends.
4. Q4 Guidance
The company projects Q4 net sales of $1.26 billion at the midpoint, implying 6.2% sequential growth and a 29.8% year-over-year rise. Non-GAAP EPS is expected between $0.48 and $0.52, with gross margin of 60.5-61.5% and operating margin of 28.8-30.2%.