Microchip Technology Updates Financial Guidance for First Quarter Fiscal 2021

CHANDLER, Ariz., June 02, 2020 (GLOBE NEWSWIRE) -- (NASDAQ: MCHP) – Microchip Technology Incorporated, a leading provider of smart, connected and secure embedded control solutions, today updated the range of its prior guidance for net sales and GAAP and non-GAAP earnings per share for its fiscal first quarter of 2021 ending June 30, 2020.  Microchip now expects consolidated net sales for the June quarter to be $1.247 billion to $1.326 billion, or between flat and down 6% sequentially with a mid-point of down 3.0%.  Microchip previously provided guidance on May 7, 2020 for consolidated net sales to be $1.194 billion to $1.3 billion or down between 2% and 10% sequentially, with a midpoint of down 6%.  GAAP earnings per share is now expected to be between $0.25 and $0.39 and non-GAAP earnings per share is expected to be between $1.35 and $1.53.  The original guidance for GAAP earnings per share was $0.13 to $0.31 and the original guidance for non-GAAP earnings per share was between $1.25 and $1.45.  We are not able to estimate the amount of “Special Charges and Other Expense” or the amount of any gain or loss on the recently completed debt retirement and convertible debt exchange transactions, and therefore our estimate of GAAP earnings per share excludes any such amounts.

“With two months of the quarter behind us, our business is performing better than we expected during our May 7, 2020 earnings conference call. COVID-19 related supply chain disruptions which were primarily in Malaysia and Philippines have eased.  We have begun to make up for lost production and expect to continue to gain ground through the end of this quarter,” said Steve Sanghi, Chief Executive Officer.

“Our customers’ factories in China are fully back to work. Some of our other customers’ factories in Europe and North America have also started to reopen, including automotive factories where we saw the largest demand destruction.  With quicker recovery from supply chain disruptions versus our earlier expectations, and with a lower level of June 2020 quarter cancellations and pushouts than earlier anticipated, we are narrowing our quarterly net sales and earnings per share guidance ranges and increasing the midpoint,” Mr. Sanghi concluded.