Microchip Technology followed a familiar pattern for many semiconductor stocks this earnings season. The chipmaker posted in-line to better-than-expected results for the December quarter but forecast March-quarter sales and earnings well below consensus estimates.
The Chandler, Ariz.-based company late Thursday delivered mixed results for the December quarter. Microchip earned an adjusted $1.08 a share on sales of $1.77 billion in its fiscal third quarter ended Dec. 31. Analysts had predicted earnings of $1.04 a share on sales of $1.77 billion. On a year-over-year basis, Microchip's earnings fell 31% while sales dropped 19%.
For the current quarter, Microchip forecast adjusted earnings of 57 cents a share on sales of $1.33 billion, based on the midpoint of its guidance. Wall Street had been modeling earnings of 92 cents a share on sales of $1.66 billion in the fiscal fourth quarter.
On the stock market today, MCHP stock fell 1.6% to close at 84.29.
Semiconductor Stocks Down For Week
Meanwhile, the Philadelphia semiconductor index, known as SOX, rose 1.3% on Friday. For the week, the SOX was down a fraction. The index includes the 30 largest semiconductor stocks traded in the U.S.
Other chipmakers this week announced in-line or better December-quarter results with disappointing guidance for the March quarter. Those semiconductor stocks included Allegro MicroSystems, MaxLinear and Wolfspeed.
Those chipmakers blamed weakness in automotive, industrial and telecom infrastructure markets.
The downturn in industrial chip sales is "in full swing and sounds really bad," Jordan Klein, managing director for tech, media and telecom sector trading at Mizuho Securities, said in a client note Friday. No one knows when the bottom in the market will be, he said.
Last week, semiconductor stocks Intel and Texas Instruments followed the same pattern as many peers. They beat fourth-quarter estimates but guided down for the current quarter.
AI Chipmakers Standing Strong
Advanced Micro Devices also delivered a beat-and-miss quarterly report this week. Its March-quarter guidance was impacted by expected declines in chips for PCs, servers and gaming. However, a favorable outlook for its data-center AI accelerators has buoyed AMD stock.
The best-performing semiconductor stocks lately have been those exposed to the artificial intelligence trend. They include AMD, Broadcom, Marvell Technology and Nvidia.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
