May 29 (Reuters) - Microchip Technology MCHP.O raised its forecast for first-quarter net sales and adjusted profit on Thursday, aided by a faster-than-expected recovery in demand for its automotive chips after a prolonged slump.
Shares of the company were up around 2% in extended trading.
For more than a year, the automotive chip industry underwent a downturn as auto customers cut back on new orders to work through the semiconductor inventory stockpiled during the pandemic.
"With almost two months of the quarter behind us, our business is performing better than we expected at the time of our May 8, 2025 earnings conference call," said Chief Executive Officer Steve Sanghi.
"Our bookings activity for the month of May is tracking to be higher than any month in the last two years," he added.
The company now expects net sales for the quarter ended June 30 to be between $1.05 billion and $1.07 billion, compared to its earlier forecast of $1.02 billion and $1.07 billion.
It also raised its forecast for adjusted earnings per share to between 22 cents and 26 cents, from the earlier expectations of 18 cents and 26 cents.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Vijay Kishore)
((Zaheer.Kachwala@thomsonreuters.com;))
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