Demo
MCHP Nasdaq· Microchip Technology, Inc
FundamentalsNews digest Peer analysis
Login
MCHP Nasdaq· Microchip Technology, Inc
Earnings report Q4 2023

MCHP Reports Decline in Revenue in Latest Quarter

Segments of revenue

MCHP's net sales for the three months ended December 31, 2023, accounted for 100% of their total revenue. However, the company experienced a decline in revenue compared to the same period in the previous year.

Strengths

Despite the decline in revenue, MCHP's gross profit margin remained relatively stable at 63.4% for the latest quarter. This indicates that the company was able to maintain profitability despite the challenging business conditions. Additionally, MCHP's operating income for the quarter was 30.0% of net sales, demonstrating efficient cost management.

Challenges

MCHP faced several challenges in the latest quarter. The company experienced a push-out or cancellation of backlog, which adversely impacted their revenue. This was primarily due to the slowing macroeconomic environment and increased inventory levels. Additionally, MCHP's business heavily relies on distributors, with sales to distributors accounting for approximately 48% of their net sales. Any disruptions or challenges faced by these distributors could have a significant impact on MCHP's revenue.

Noteworthy

It is worth noting that MCHP paused most of their factory expansion actions and reduced planned capital investments through fiscal 2025 in response to the slowing macroeconomic environment. This decision was aimed at managing inventory levels and aligning with the challenging business conditions.

Summary

MCHP reported a decline in revenue for the latest quarter, primarily driven by a push-out or cancellation of backlog and the challenging macroeconomic environment. However, the company demonstrated strength in maintaining a stable gross profit margin and efficient cost management. MCHP's heavy reliance on distributors poses a potential risk to their revenue, and they have taken measures to manage inventory levels and align with the current business conditions.

Source documents

Form 10-Q  filed on Feb 01, 2024
113 pages scanned

Reference data

Company financials Q4 revenue 1.77B
Analyst estimates Q4 EPS beat by 3.76%
Sign up to Fey

Get in-depth analysis on thousands of stocks for just $30/month. Cancel anytime.