EmailMicrochip (MCHP $32.26 -5.22) lowered its first quarter non-GAAP EPS
guidance to $0.53 to $0.55 from $0.58 to $0.62 versus the $0.60 Capital IQ
Consensus Estimate.
"Our net sales activity in the June quarter did not progress as we originally
expected. We are seeing broad-based weakness in our business due to a number of
factors. In the June quarter, our automotive business was down significantly
from the March 2011 quarter due to lower automotive production activities
including supply issues from other manufacturers associated with the earthquake
in Japan. We also believe that some of the revenue upside that we saw in the
March 2011 quarter was the result of customers being cautious and accelerating
purchasing activities to minimize supply chain disruptions. Therefore, we
believe we were also impacted by the correction of that inventory in the June
2011 quarter. Additionally, our consumer business was soft due to poorer global
economic conditions including high unemployment, high oil prices and the
resulting low consumer confidence. The computing portion of our business was
also lower than our expectations as we saw reduced purchases by multiple large
customers in this sector... We are cautiously modeling our September quarter rev
to be quarter/quarter down by low to mid single digits [consensus calls for +3%
QoQ off higher Q2 base]... At the end of the June and September quarters, our
inventory is expected to be in the 120 to 130 day range, which is acceptable to
us and will enable us to keep our lead times short and help us be more
competitive in our markets."
than one year.
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