Microchip Technology reports drop in 4Q, annual income

Thursday, May 7, 2009, 4:45pm MST

Phoenix Business Journal


Microchip Technology Inc. reported profitable fourth-quarter and yearly results on Thursday, but the numbers were down from last year.

Yearly net income for Chandler-based Microchip (Nasdaq: MCHP) was $248.8 million, a drop from its $297 million in 2008.

Its fourth-quarter revenue was a main contributor in the company’s decreased annual revenue. For the year, Microchip brought in $903 million in revenue compared with $1 billion in 2008. Its fourth-quarter revenue was $173 million, down from $260 million for the same quarter last year.

Net income dropped from $76.6 million in 2008 to $22.8 million in 2009 amid global softness for semiconductors.

Despite the numbers, the company began seeing improvement in its orders during the first quarter, said Steve Sanghi, Microchip president and CEO.

“We were pleased to end the quarter modestly better than the midpoint of our revenue guidance given on March 10, 2009, and at the high end of our earnings per share guidance,” he said. “The earnings per share achievement was driven by excellent control of our operating expenses. I want to thank all of Microchip’s employees for the sacrifices they have made, as well as for their overall diligence in driving the reductions in operating expenses.”

The company’s net income was driven by cost cuts amid a lower revenue picture. The company issued no revenue guidance for its first quarter because of lingering problems in the global economy, but said internally it was looking at about $182 million in revenue.