Overview

* Microchip fiscal Q1 2026 sales of $1.0755 bln beat analyst expectations

* Adjusted EPS of $0.27 for fiscal Q1 exceeds analyst estimates, per LSEG data

* Company reduced inventory by $124.4 mln, improving working capital efficiency

Outlook

* Microchip expects Q2 net sales of $1.110 bln to $1.150 bln

* Company anticipates Q2 GAAP gross profit of 54.3% to 56.2%

* Microchip forecasts Q2 non-GAAP EPS of $0.30 to $0.36

* Capital expenditures for fiscal 2026 expected below $100 mln

Result Drivers

* INVENTORY REDUCTION - Co reduced inventory by $124.4 mln, improving working capital efficiency

* STRATEGIC IMPERATIVES - Execution of strategic imperatives under recovery plan drove sequential revenue growth

* DESIGN WINS - Secured design wins with tier-one cloud providers for AI infrastructure and defense applications

Key Details

Metric Beat/Mis Actual Consensu

s s

Estimate

Q1 Sales Beat $1.08 $1.06

bln bln (19

Analysts

)

Q1 Beat $0.27 $0.24

Adjusted (21

EPS Analysts

)

Q1 EPS -$0.09

Q1 Beat $154.70 $133.40

Adjusted mln mln (18

Net Analysts

Income )

Q1 Net -$46.40

Income mln

Analyst Coverage

* The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"

* The average consensus recommendation for the semiconductors peer group is "buy"

* Wall Street's median 12-month price target for Microchip Technology Inc ( MCHP ) is $75.00, about 11.8% above its August 6 closing price of $66.17

* The stock recently traded at 37 times the next 12-month earnings vs. a P/E of 39 three months ago

Press Release:

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)