MCHP stock rose in after-hours trading on January 6, 2020, after the company reported strong bookings.
Microchip Technology Incorporated, a leading provider of smart, connected and secure embedded control solutions, today provided an update on the business environment it is experiencing. Microchip has continued to experience strong bookings since October 2019. Microchip now expects consolidated net sales for the December 2019 quarter to be $1.281 billion to $1.288 billion, or down between 3.75% and 4.25% sequentially with a mid-point of down 4%. Microchip previously provided revised guidance on December 3, 2019 for consolidated net sales to be $1.244 billion to $1.298 billion, or down between 3% and 7% sequentially with a mid-point of down 5%.
“We continued to experience strong bookings in December 2019 that resulted in better than expected billings for the December 2019 quarter and improved backlog for the March 2020 quarter” said Steve Sanghi, Microchip’s CEO. “The December 2019 quarter book-to-bill ratio was above 1.0 after several quarters of the book-to-bill ratio being below 1.0. The opening backlog for the March 2020 quarter is currently significantly higher than the opening backlog was for the December 2019 quarter. Microchip is seeing strength coming from all major geographies including the U.S., Europe and Asia, as well as several major end markets including data center, industrial and automotive.”
“Based on several inflexion points we are seeing in the business, we believe that the December 2019 quarter was the bottom of this cycle for Microchip, barring any negative developments on the U.S./China trade front or unexpected fallout from geopolitical events. We are preparing our factories and subcontractors to be able to deliver better than mid-single digit percentage sequential revenue growth in the March 2020 quarter. We will provide sales and earnings guidance for the March 2020 quarter on February 4, 2020 via our quarterly earnings release and conference call,” concluded Mr. Sanghi.