Microchip Tech forecasts current quarter above estimates
(Reuters) - Chipmaker Microchip Technology Inc (MCHP.O) forecast a larger-than-expected profit and revenue for the current quarter after reporting third-quarter results that beat Wall Street expectations on higher sales of its microcontroller chips.
The company's shares rose 7 percent to $36.20 in extended trading on Thursday.
Chip companies that cater to the growing smartphone and tablet industry have seen rising demand for chips like microcontrollers, which are used in touchscreen interfaces of mobile devices. These chips are also used in consumer electronic products like air conditioners.
Microcontroller revenue was up 22.6 percent in the third quarter. Microcontrollers represented 63.9 percent of Microchip's overall revenue of $416 million in the quarter ended December 31.
"We are starting to see exceptionally strong bookings and expedite activity in our business, driven by solid demand and a robust design-win pipeline," Chief Executive Steve Sanghi said in a statement.
The company also said its reduced factory output in the December quarter brought inventory levels down.
Microchip expects its fourth-quarter revenue to rise between 1 percent and 4 percent, or between $420.2 million and $432.7 million, from the third quarter. It expects adjusted earnings of 45 cents to 49 cents per share.
Analysts on average were expecting earnings of 42 cents per share on revenue of $417.8 million, according to Thomson Reuters I/B/E/S.
Excluding items, the company earned 41 cents per share in the third quarter, trumping the average analyst expectation of 37 cents.
Microchip shares closed at $33.94 on the Nasdaq on Thursday.
(Reporting by Siddharth Cavale in Bangalore; Editing by Maju Samuel)