Microchip Technology Inc. (MCHP), Texas Instruments Incorporated (TXN): This Semiconductor Manufacturer Looks Good

Page 1 of 2

Microchip Technology Inc. (NASDAQ:MCHP) is a leading semiconductor manufacturer with a strong track record of paying dividends and has been increasing shareholder payouts consistently since 2002. It looks like the case for buying this semiconductor company is getting stronger by the day, especially since it released strong first quarter results last month. Let’s take a look at the results.

Microchip Technology Inc. (NASDAQ:MCHP)Terrific performance

Microchip Technology Inc. (NASDAQ:MCHP) reported exceptional first quarter results, recording top-line growth and adjusted earnings that beat consensus estimates. Net revenue for the reported quarter hit $462.8 million, beating the consensus estimates of $455 million. This was a 31.4% gain from the year-ago quarter which is an impressive gain.

Revenue was up driven by broad based growth across all product lines. Sales of 32-bit microcontrollers saw a staggering 362% jump, primarily aided by the new design wins and applications. Microchip Technology Inc. (NASDAQ:MCHP) launched a new family of PIC32MX3/4/ microcontrollers in different configurations and these find applications in connectivity, graphics display, capacitive touch and in embedded systems. This provides a complete solution to application designers with its high RAM memory options and superior combination of hardware at a lower cost. Net sales of microcontroller products inched up 24.8% on a year-over-year basis to reach an all-time high record of $300.3 million. Analog revenue moved up 119% year-over-year to reach $103.2 million.

Leaving out non-recurring items, adjusted net income was a record high of $120.4 million, or $0.57 per share, which is a 24.3% improvement over year-ago earnings.

Looking ahead

The future looks good for Microchip Technology Inc. (NASDAQ:MCHP). 16- and 32-bit microcontrollers set a new high for revenue in the quarter and it is expected that 8 bit microcontrollers will definitely achieve this in the coming quarter. The company is gaining new customers in the 8 bit MCU at the expense of competitors.

The company had shipped a record number of development systems in the June quarter and this bodes well for future growth. It is continuing to win new designs and expanding in order to fuel further growth in market share.

In the analog segment, the company is also pushing for developing and introduced a wide range of innovative and proprietary new products to stimulate the future growth of the analog business, which had seen growth of 6.2% sequentially.

In terms of operating profit, it once again exceeded 30%, and Microchip Technology Inc. (NASDAQ:MCHP) is making appreciable progress towards its long-term goal of 32.5% operating profit. The book-to-bill ratio was strongly positive in the June quarter. The starting backlog for the September quarter was significantly higher than the starting backlog for the June quarter.

This year has been soft for smartphones and tablets as evidenced by reports of many chip manufacturers with high exposure to that segment. This year, the strong sectors are housing, industrial and automotive and Microchip Technology Inc. (NASDAQ:MCHP) has very strong exposure in all these three segments of the market, so it will only stand to gain from it.

With better-than-expected orders fueled by excellent demand and robust product designs, Microchip is expected to continue its bull run in the coming quarters.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!