Microchip Technology Inc. reported record annual sales and projected better-than-expected sales this quarter on strong demand despite continued manufacturing capacity constraints.
Fourth-quarter profit rose to $437.9 million, or 77 cents a share, from $116 million a year earlier. On an adjusted basis, profit was $1.35. The company had projected 66 cents to 68 cents a share, or $1.22 to $1.28 a share as adjusted.
Net sales for the quarter ended March 31 rose to $1.84 billion, from $1.47 billion a year earlier, compared with analysts’ projected $1.82 billion and Microchip’s $1.79 billion to $1.85 billion.
ended the year at a profit of $1.29 billion on $6.82 billion in sales, compared with a profit of $349.4 million and $5.44 billion in sales a year earlier.
This quarter, the company expects to make 85 cents to 86 cents a share, or $1.32 to $1.36 a share as adjusted, on $1.92 billion to $1.99 billion in revenue. Analysts expect 75 cents a share, or $1.28 a share as adjusted, and about $1.86 billion in sales.
Chief Executive Ganesh Moorthy said in a statement that as in the March quarter, there’s a considerable amount of backlog requested by customers that Microchip cannot fulfill this quarter despite its expanded capacity and that the company expects to remain supply-constrained into 2023.
Mr. Moorthy said that the company’s Preferred Supply Program accounts for more than half of backlog and 100% of backlog in the most constrained capacity areas.
The Preferred Supply Program, which Microchip launched in the March quarter last year, offers customers prioritized capacity starting 6 months after their order of 12 months of continuous, non-cancellable and non-reschedulable backlog.
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