Microchip Technology (NASDAQ:MCHP) Announces Earnings Results, Beats Expectations By $0.01 EPS

Microchip Technology (NASDAQ:MCHP) announced its earnings results on Thursday. The semiconductor company reported $0.44 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.43 by $0.01, FiscalAI reports. The business had revenue of $1.19 billion during the quarter, compared to analyst estimates of $1.19 billion. Microchip Technology had a negative net margin of 4.39% and a positive return on equity of 5.21%. Microchip Technology’s revenue for the quarter was up 15.6% on a year-over-year basis. During the same period in the previous year, the business posted $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 MCHP opened at $78.04 on Friday. Microchip Technology has a one year low of $34.13 and a one year high of $81.43. The company has a 50-day simple moving average of $69.54 and a two-hundred day simple moving average of $65.57. The company has a debt-to-equity ratio of 0.80, a current ratio of 2.25 and a quick ratio of 1.20. The firm has a market capitalization of $42.18 billion, a PE ratio of -173.42, a price-to-earnings-growth ratio of 2.00 and a beta of 1.46.

Microchip Technology News Summary

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

• Positive Sentiment: Q3 results beat expectations — EPS $0.44 (above consensus) and revenue roughly in line at ~$1.19B; shows improving top-line versus the prior year and sequential recovery in key end markets. Microchip Technology (MCHP) Q3 Earnings and Revenues Top Estimates
• Positive Sentiment: Management updated Q4 FY2026 guidance to EPS $0.480–0.520 and revenue $1.2B–$1.3B (company-stated guidance that can be read as conservative upside versus some street views). Press Release / Guidance
• Positive Sentiment: Board declared a quarterly cash dividend of $0.455 per share, supporting yield-focused investor appeal and signaling confidence in cash flow. Dividend Announcement
• Positive Sentiment: Strategic wins/partnerships: collaboration with Hyundai Motor Group to explore single-pair Ethernet for automotive increases exposure to auto connectivity trends. Hyundai Collaboration
• Positive Sentiment: Analyst action: Cantor Fitzgerald raised its price target to $100, indicating some analysts see meaningful upside from current levels. Price Target Increase
• Neutral Sentiment: Company posted conference call slides and press release with additional detail (useful for modeling revenue/margin recovery and one-time charges). Slide Deck / Call
• Negative Sentiment: Reuters flagged Microchip’s forecast as reflecting pressure from memory-supply shortages — investors worry this could blunt demand or margin recovery across parts of the business. Memory Shortage / Forecast Concerns
• Negative Sentiment: Shares fell intraday (reported ~4% in some outlets) despite the beat — market reaction driven by inventory/underutilization charges (~$122.8M reported) and cautious commentary on certain end markets. Shares Fall Despite Beat
• Negative Sentiment: Company-level profitability metrics still show pressure: a reported negative net margin and inventory-related charges complicate near-term margin outlook. Profitability Details

Analyst Upgrades and Downgrades

Several research analysts have commented on MCHP shares. Piper Sandler lifted their price target on shares of Microchip Technology from $80.00 to $85.00 and gave the stock an “overweight” rating in a research note on Thursday, January 15th. Citigroup upped their price target on shares of Microchip Technology from $80.00 to $92.00 and gave the company a “buy” rating in a research report on Thursday, January 15th. Wolfe Research set a $85.00 price objective on Microchip Technology in a research note on Tuesday, January 6th. Morgan Stanley boosted their price objective on Microchip Technology from $68.00 to $69.00 and gave the company an “equal weight” rating in a research report on Tuesday, January 6th. Finally, Bank of America raised Microchip Technology from a “neutral” rating to a “buy” rating and set a $95.00 price objective for the company in a research note on Wednesday, January 28th. Three investment 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 assigned a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $82.73.

Insider Activity at Microchip Technology

In related news, CEO Steve Sanghi sold 98,814 shares of the stock in a transaction dated Wednesday, January 28th. The shares were sold at an average price of $80.55, for a total value of $7,959,467.70. Following the completion of the transaction, the chief executive officer directly owned 9,922,319 shares in the company, valued at $799,242,795.45. This trade represents a 0.99% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, CFO James Eric Bjornholt sold 4,292 shares of the company’s stock in a transaction dated Tuesday, November 25th. The stock was sold at an average price of $50.39, for a total transaction of $216,273.88. Following the completion of the sale, the chief financial officer owned 30,089 shares in the company, valued at approximately $1,516,184.71. This trade represents a 12.48% decrease in their position. The SEC filing for this sale provides additional information. Insiders have sold 121,615 shares of company stock worth $9,641,654 over the last 90 days. 1.94% of the stock is currently owned by corporate insiders.

Institutional Trading of Microchip Technology

A number of hedge funds have recently made changes to their positions in MCHP. CIBC Bancorp USA Inc. bought a new position in shares of Microchip Technology during the third quarter valued at $6,051,000. Coldstream Capital Management Inc. increased its stake in Microchip Technology by 22.3% during the 3rd quarter. Coldstream Capital Management Inc. now owns 18,576 shares of the semiconductor company’s stock valued at $1,193,000 after purchasing an additional 3,392 shares in the last quarter. Danske Bank A S purchased a new position in Microchip Technology in the third quarter worth about $16,493,000. Fulcrum Asset Management LLP bought a new position in shares of Microchip Technology in the third quarter worth approximately $52,000. Finally, Harvest Investment Services LLC purchased a new stake in shares of Microchip Technology during the third quarter valued at approximately $1,111,000. 91.51% of the stock is owned by institutional investors.

Microchip Technology Company Profile

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.