Microchip Q1 Revenue $1.33B, Down 40.6% YoY

Microchip Technology, a leading automotive microcontroller (MCU) manufacturer, announced its financial results for the fourth quarter of the 2024 fiscal year (January to March 2024) on May 6. Although the results were in line with expectations, the company's outlook for the second quarter fell short of market projections due to ongoing inventory adjustments in the automotive market and conservative customer demand. This led to a 4% drop in the company's stock price during after-hours trading.

First-quarter revenue totaled $1.33 billion, representing a 40.6% decrease year-over-year but matching analysts' expectations. Adjusted earnings per share (EPS) were $0.57, also consistent with analysts' estimates.

For the second quarter of the 2024 calendar year, Microchip projects revenue between $1.22 billion and $1.26 billion, lower than the consensus forecast of $1.34 billion. Adjusted EPS is expected to range from $0.29 to $0.32, which is below the consensus estimate of $0.59.

Microchip noted that the excess inventory accumulated by customers during the pandemic is still being absorbed, limiting short-term demand. However, the company expects inventory levels to bottom out during the current quarter, which should lead to positive revenue growth in the second quarter.