Microchip Technology (NASDAQ:MCHP) saw its stock surge 5.82% in after-hours trading on Thursday following the release of its fourth-quarter fiscal 2025 results and optimistic forward guidance. The semiconductor company's performance exceeded expectations, signaling potential recovery in the challenging chip market.

For the fourth quarter, Microchip reported adjusted earnings per share of $0.11, meeting analysts' consensus estimates. While this represents a significant decrease from $0.57 per share in the same period last year, it aligns with the broader industry slowdown. More impressively, the company's quarterly sales reached $970.5 million, surpassing the estimated $962.76 million and demonstrating resilience in a tough market environment.

Investors were particularly encouraged by Microchip's forward-looking statements. The company provided a revenue outlook of $1,020-1,070 million for the first quarter of fiscal 2026, suggesting a potential upturn in business conditions. Additionally, Microchip projected adjusted earnings per share between $0.18 and $0.26 for the upcoming quarter, indicating expected profitability improvements. Further boosting investor confidence, the company revealed that its bookings in April were higher than any month in the March quarter, hinting at strengthening demand. Microchip also announced a quarterly cash dividend of 45.5 cents per share, maintaining its commitment to shareholder returns despite market challenges.