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
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!