By Katherine Hamilton
Microchip Technology shares rose after the chief executive said he thinks the industry's down cycle is over, and provided a sales outlook for the current quarter that was above expectations.
The stock climbed 8%, to $53.00, on Thursday after the market closed. Shares are still down 14% this year after hitting a 52-week low shortly after tariffs were announced.
The maker of chips and circuits for electronics said Thursday it recorded $970.5 million in revenue during the fiscal fourth quarter. That was ahead of the company's own guidance midpoint of $960 million and analysts' forecast of $962.6 million. Revenue was still down 27% from the year-ago quarter.
Chief Executive Steve Sanghi said he believes this quarter marked the bottom of a prolonged downturn in the microchip industry. Bookings in April were higher than any month in the fiscal fourth quarter, he said.
He expects revenue to be $1.02 billion to $1.07 billion during the fiscal first quarter, ahead of the $980 million analysts had been projecting.
The company reduced its inventory to mitigate the downturn, Sanghi said, and he anticipates more reduction in the current quarters manufacturing optimization is near complete.
"In the March 2025 quarter, we achieved our first positive book-to-bill ratio in nearly three years; and we have clearly reached an inflection point," Sanghi said.
Write to Katherine Hamilton at katherine.hamilton@wsj.com
(END) Dow Jones Newswires
May 08, 2025 18:22 ET (22:22 GMT)
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