Core Insights - Microchip Technology (MCHP) is scheduled to report its second-quarter fiscal 2026 results on November 6, with expected net sales between $1.110 billion and $1.150 billion, indicating a sequential growth of approximately 5.1% [1][7] - The Zacks Consensus Estimate for revenues in the second quarter is $1.13 billion, reflecting a year-over-year decline of 2.74% [1][2] - Anticipated non-GAAP earnings per share (EPS) are projected to be between 30 and 36 cents, with the consensus mark for earnings also at 33 cents, representing a year-over-year decline of 28.26% [1][2] Financial Performance Expectations - Microchip's earnings have historically beaten the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 0.23% [2] - The company has been facing macroeconomic challenges but is expected to show improved inventory levels, which have decreased from 214 days in the first quarter to an anticipated range of 195 to 200 days by the end of the second quarter [2][3] Revenue and Margin Drivers - Improved inventory levels are expected to positively impact gross margins in the upcoming quarter, with revenues benefiting from inventory corrections at distributors and increased direct customer shipments [3][7] - The company has secured strong design wins in high-growth sectors such as industrial, aerospace, and automotive, which are likely to contribute to revenue growth in the reported quarter [4][7] Earnings Outlook - According to the Zacks model, Microchip has an Earnings ESP of 0.00% and a Zacks Rank of 3, indicating a neutral outlook for earnings performance [5]

Core Insights - Microchip Technology (MCHP) is expected to report its first-quarter fiscal 2026 results on August 7, with anticipated net sales between $1.02 billion and $1.07 billion, and non-GAAP earnings projected between 18 cents and 26 cents per share [1][7] - The Zacks Consensus Estimate for revenues in the first quarter of fiscal 2026 is $1.05 billion, reflecting a 15.1% decline compared to the same quarter last year [1][2] Revenue and Earnings Expectations - The consensus estimate for fiscal first-quarter earnings is set at 24 cents per share, indicating a year-over-year decline of 54.7% [2] - Microchip has beaten the Zacks Consensus Estimate in three of the last four quarters, with an average negative earnings surprise of 2.42% [2] Inventory and Margin Insights - The company has been facing macroeconomic challenges, but improving inventory levels are expected to positively impact gross margins, with inventory days projected to decrease to between 215 and 225 by the end of the fiscal first quarter [3][4][7] - The previous quarter's inventory levels reached 251 days, an increase of 15 days sequentially [3] Sector Performance and Innovations - Microchip is benefiting from strong design wins in the industrial, aerospace, and automotive sectors, with innovations such as 64-bit RISC-V processors and advanced Wi-Fi solutions contributing to revenue growth [5] - The company's focus on high-growth areas like aerospace, defense, and AI is expected to enhance adoption across automotive, industrial, and AI/ML markets, further boosting revenues [5] Earnings Prediction Model - According to the Zacks model, Microchip has an Earnings ESP of -0.19% and a Zacks Rank of 2, indicating a lower likelihood of an earnings beat compared to other stocks with a positive Earnings ESP [6]