Microchip says 2Q results will miss its guidance

CHANDLER, Ariz. (AP) ? Microchip Technology Inc. said Thursday that its fiscal second-quarter results will be lower than it expected due to a drop in demand for its chips.

Based on preliminary results, the company expects to report second-quarter net income of 38 to 40 cents per share, or 45 to 47 cents per share excluding one-time items. The company forecast net income of 44 to 48 cents per share, or 50 to 54 cents per share excluding items, back in August.

Analysts polled by FactSet expected adjusted net income of 52 cents per share.

Microchip believes sales for the quarter ending Sept. 30 dropped 11 percent year over year to $340.6 million. The company previously forecast $352.0 million to $370.8 million in revenue.

Analysts expected $359.6 million in revenue.

In a statement, Microchip CEO Steve Sanghi said the company had expected business to be rougher earlier in the quarter to due to generally weaker demand, but thought it would pick up later in the period with higher demand in Asia leading up to the holiday season.

“Instead we experienced incrementally stronger headwinds and saw no seasonal Christmas build, which in turn adversely impacted all of our product lines and sales channels,” he said.

Microchip shares fell 21 cents to $35.31 in after-hours trading, after rising 85 cents, or 2.5 percent, to $35.31 during regular trading.