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Microchip Technology shares dip on weak quarterly profit

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Microchip Technology shares dip on weak quarterly profit

Microchip Technology Inc.'s shares fell more than 4% in after-hours trading after the chip maker said its fiscal first-quarter net income declined year over year due to charges related to its acquisition of Microsemi Corp.

The company's net income came in at $35.7 million, or 14 cents per share, in the quarter that ended June 30, down from $170.6 million, or 70 cents per share, in the same period last year.

Microchip said its earnings included a $226.9 million charge stemming from Microsemi purchase accounting, restructuring, and other charges.

Non-GAAP EPS stood at $1.61, up from $1.31 a year ago and higher than the S&P Global Market Intelligence final first-quarter estimate of $1.48.

Net sales totaled $1.21 billion for the quarter, up from $972.1 million.

Total operating expenses increased to $509.7 million for the quarter from $362.8 million. Operating income fell to $132.3 million from $221.6 million in the prior-year period.

Microchip did not provide full-year outlook but said it expects its second-quarter non-GAAP EPS in the range of $1.65 to $1.83.

The company also declared a quarterly cash dividend of 36.40 cents per share, payable Sept. 4 to stockholders of record Aug. 21.

"Over the next several years, we intend to use substantially all of our net cash generation, beyond our dividend payments, to de-leverage the balance sheet," Microchip CFO Eric Bjornholt said.

As of 4:50 p.m. ET, Microchip's shares were down 4.72%.