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Microchip Profit Warning Sparks Industry Fears
6 Feb
Summary
- Chipmaker Microchip forecasts Q4 profit below estimates.
- Memory supply crunch impacts wider semiconductor industry.
- Company shares fell over 5% after the forecast was released.
Chipmaker Microchip Technology (MCHP.O) has projected fourth-quarter profits that fall short of Wall Street's predictions, signaling potential difficulties within the broader semiconductor market. The company anticipates adjusted earnings of around 40 cents per share for the upcoming quarter.
This forecast contrasts with analysts' average estimate of 48 cents per share. Microchip expects net sales to range between $1.24 billion and $1.28 billion for the fourth quarter, slightly above the $1.23 billion estimate.
The company's outlook is influenced by a global memory supply crunch. This shortage has already strained the personal electronics industry, compelling smartphone and personal computer manufacturers to reduce orders as they contend with shipping delays for finished products.
In the third quarter, Microchip reported net sales of $1.19 billion, surpassing the $1.18 billion estimate. Adjusted profit per share for the third quarter was 44 cents, exceeding the analysts' expected 41 cents.
