Microchip Technology (NASDAQ:MCHP) Posts Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Microchip Technology (NASDAQ:MCHP) released its quarterly earnings results on Thursday. The semiconductor company reported $0.44 earnings per share for the quarter, topping analysts’ consensus estimates of $0.43 by $0.01, FiscalAI reports. The business had revenue of $1.19 billion during the quarter, compared to the consensus estimate of $1.19 billion. Microchip Technology had a negative net margin of 4.39% and a positive return on equity of 5.21%. The business’s quarterly revenue was up 15.6% compared to the same quarter last year. During the same quarter last year, the company earned $0.20 earnings per share. Microchip Technology updated its Q4 2026 guidance to 0.480-0.520 EPS.

Here are the key takeaways from Microchip Technology’s conference call:

• Microchip beat its December-quarter targets with net sales of $1.186B (up 4% sequential), non-GAAP EPS of $0.44 (above prior guidance), and guided March-quarter revenue to $1.26B ± $20M with non-GAAP EPS of $0.48–$0.52.
• Management highlighted strong momentum in automotive and industrial Ethernet connectivity (notably 10BASE-T1S, ASA and PCIe), including a strategic collaboration with Hyundai and multiple design wins with pilot ramps expected in H2 2026.
• Microchip reported three PCIe Gen6 design wins — one expected to deliver a >$100M revenue contribution in calendar 2027 — emphasizing a technology lead with a 3nm Gen6 device and Gen7 development underway.
• Inventory and manufacturing underutilization remain headwinds — ending inventory was $1.058B (201 days) and the quarter included $58.4M of new inventory reserves plus $51.7M of capacity underutilization charges that management says will take years to fully normalize.
• Cash flow improved (adjusted FCF $305.6M) and net debt/adjusted EBITDA fell to 4.18; management said excess free cash will be used to pay down debt rather than resume buybacks until leverage is meaningfully lower.

Microchip Technology Stock Performance

Shares of NASDAQ:MCHP traded down $2.72 on Friday, hitting $75.32. The company’s stock had a trading volume of 6,079,019 shares, compared to its average volume of 9,409,322. Microchip Technology has a 12 month low of $34.13 and a 12 month high of $81.43. The company has a debt-to-equity ratio of 0.80, a quick ratio of 1.20 and a current ratio of 2.25. The company has a market capitalization of $40.71 billion, a price-to-earnings ratio of -167.18, a price-to-earnings-growth ratio of 2.00 and a beta of 1.46. The stock’s 50-day moving average is $69.54 and its two-hundred day moving average is $65.57.

Microchip Technology Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, March 10th. Investors of record on Monday, February 23rd will be issued a $0.455 dividend. This represents a $1.82 dividend on an annualized basis and a dividend yield of 2.4%. The ex-dividend date of this dividend is Monday, February 23rd. Microchip Technology’s dividend payout ratio (DPR) is -404.44%.

Insiders Place Their Bets

In other Microchip Technology news, CFO James Eric Bjornholt sold 4,292 shares of Microchip Technology stock in a transaction that occurred on Tuesday, November 25th. The shares were sold at an average price of $50.39, for a total value of $216,273.88. Following the completion of the sale, the chief financial officer directly owned 30,089 shares in the company, valued at $1,516,184.71. The trade was a 12.48% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO Steve Sanghi sold 98,814 shares of the stock in a transaction on Wednesday, January 28th. The stock was sold at an average price of $80.55, for a total transaction of $7,959,467.70. Following the transaction, the chief executive officer owned 9,922,319 shares in the company, valued at approximately $799,242,795.45. This trade represents a 0.99% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 121,615 shares of company stock worth $9,641,654 in the last three months. Company insiders own 1.94% of the company’s stock.

Hedge Funds Weigh In On Microchip Technology

Several hedge funds have recently bought and sold shares of MCHP. Boston Partners boosted its stake in shares of Microchip Technology by 9.5% during the 3rd quarter. Boston Partners now owns 16,234,332 shares of the semiconductor company’s stock worth $1,044,024,000 after acquiring an additional 1,406,885 shares in the last quarter. Rafferty Asset Management LLC lifted its holdings in Microchip Technology by 41.0% in the 2nd quarter. Rafferty Asset Management LLC now owns 6,203,762 shares of the semiconductor company’s stock worth $436,559,000 after purchasing an additional 1,803,945 shares during the last quarter. Amundi lifted its holdings in Microchip Technology by 5.6% in the 3rd quarter. Amundi now owns 3,197,249 shares of the semiconductor company’s stock worth $212,905,000 after purchasing an additional 170,358 shares during the last quarter. Ameriprise Financial Inc. boosted its position in Microchip Technology by 8.0% during the third quarter. Ameriprise Financial Inc. now owns 2,305,292 shares of the semiconductor company’s stock worth $148,047,000 after purchasing an additional 170,152 shares during the period. Finally, Marshall Wace LLP grew its holdings in Microchip Technology by 236.8% during the third quarter. Marshall Wace LLP now owns 1,720,200 shares of the semiconductor company’s stock valued at $110,471,000 after purchasing an additional 1,209,467 shares during the last quarter. 91.51% of the stock is owned by institutional investors and hedge funds.

Key Microchip Technology News

Here are the key news stories impacting Microchip Technology this week:

• Positive Sentiment: Multiple broker upgrades and large price-target increases signal renewed analyst optimism — Rosenblatt raised its target to $115 (buy), Mizuho to $90 (outperform) and Needham to $84 (buy). These lifts imply substantial upside from recent levels. Benzinga TickerReport
• Positive Sentiment: Q3 fiscal 2026 results topped EPS estimates ($0.44 vs. $0.43) and showed +15.6% YoY revenue growth to ~$1.19B; management issued Q4 EPS guidance of $0.48–$0.52, above consensus at the midpoint — this supports a recovery thesis. Press Release
• Positive Sentiment: Board declared a quarterly cash dividend of $0.455/share (payable March 10; ex-div Feb 23), supporting income investors and signaling confidence in cash flow. Dividend Release
• Positive Sentiment: Strategic win: collaboration with Hyundai Motor Group to explore 10BASE‑T1S single‑pair Ethernet for automotive connectivity — supports automotive revenue momentum cited on the call. Hyundai Collaboration
• Neutral Sentiment: Earnings call transcripts and analyst notes highlight improving margins, inventory normalization and sequential revenue growth (~6.2% expected into Q4), which underpin the turnaround thesis but leave execution risk. Earnings Call Sales Signal
• Negative Sentiment: Offsetting the positives, Reuters reports Microchip forecasted quarterly profit below some Wall Street estimates and flagged memory‑supply pressures — this guidance nuance likely contributed to the sell‑off despite the beat. Reuters
• Negative Sentiment: Some analysts remain cautious — TD Cowen kept a Hold and cut its target to $70, underscoring continued visibility concerns and limiting near‑term upside for more conservative investors. TipRanks/TD Cowen
• Negative Sentiment: Market reaction: shares fell after the print despite the beat — indicating investors are focusing on near‑term margin/supply risks and mixed forward commentary rather than the upbeat parts of the release. Market Reaction

Wall Street Analysts Forecast Growth

Several research firms have recently weighed in on MCHP. BNP Paribas Exane raised shares of Microchip Technology from a “neutral” rating to an “outperform” rating and set a $90.00 target price for the company in a research report on Thursday, January 22nd. Cantor Fitzgerald upped their price objective on Microchip Technology from $85.00 to $100.00 and gave the company an “overweight” rating in a research note on Monday. Jefferies Financial Group reaffirmed a “hold” rating on shares of Microchip Technology in a report on Wednesday. KeyCorp reiterated an “overweight” rating on shares of Microchip Technology in a report on Wednesday, December 3rd. Finally, Wolfe Research set a $85.00 price objective on Microchip Technology in a research note on Tuesday, January 6th. Three equities research analysts have rated the stock with a Strong Buy rating, sixteen have issued a Buy rating, five have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat, the stock currently has an average rating of “Moderate Buy” and an average target price of $84.95.

About Microchip Technology

Microchip Technology Inc is a semiconductor company headquartered in Chandler, Arizona, that designs, develops and supplies a broad portfolio of embedded control and analog semiconductors. Its product lineup centers on microcontrollers (including the well-known PIC family), digital signal controllers and associated development tools and software, along with a range of mixed-signal and analog devices, nonvolatile memory, power management, timing, interface, wireless and security products. The company also provides integrated hardware and software solutions intended to simplify embedded design and accelerate time to market for OEMs and contract manufacturers.

Microchip’s products are used across a wide range of end markets, including automotive, industrial automation, consumer electronics, communications, aerospace and defense, and Internet of Things (IoT) applications.