Microchip Technology Forecasts Q4 Sales, Earnings Below Estimates Amid Tepid Demand
Chipmaker Microchip Technology (MCHP) anticipates subdued demand in the automotive market, leading to a Q4 forecast that falls short of Wall Street expectations.
* Q4 Revenue: $920 million - $1 billion (vs. $1.06 billion consensus)
* Q4 Adjusted EPS: $0.05 - $0.15 (vs. $0.27 consensus)
Automakers previously accumulated chips during the pandemic but are now facing excess inventory due to reduced demand. Analysts predict this weakness to persist in the first half of the year.
CEO Steve Sanghi acknowledges ongoing inventory correction and emphasizes the company's focus on strategic evaluation and operational adjustments.
In Q3, Microchip reported net sales of $1.03 billion (-42% YoY, missing $1.06 billion estimate). Adjusted EPS stood at $0.20 (vs. $0.27 estimate).
Similarly, NXP Semiconductors (NXPI) recently projected Q1 revenue below estimates, indicating sluggish demand from industrial and automotive clients.