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Q3 Rundown: Microchip Technology (NASDAQ:MCHP) Vs Other Analog Semiconductors Stocks


Jabin Bastian /
2023/01/20 4:04 am EST
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Earnings results often give us a good indication of what direction the company will take in the months ahead. With Q3 now behind us, let’s have a look at Microchip Technology (NASDAQ:MCHP) and its peers.

Demand for analog chips is generally linked to the overall level of economic growth, as analog chips serve as the building blocks of most electronic goods and equipment. Unlike digital chip designers, analog chip makers tend to produce the majority of their own chips, as analog chip production does not require expensive leading edge nodes. Less dependent on major secular growth drivers, analog product cycles are much longer, often 5-7 years.

The 10 analog semiconductors stocks we track reported a decent Q3; on average, revenues beat analyst consensus estimates by 1.28%, while on average next quarter revenue guidance was 2.24% under consensus. Tech stocks have been under pressure as inflation makes their long-dated profits less valuable, but analog semiconductors stocks held their ground better than others, with the share prices up 9.25% since the previous earnings results, on average.

Microchip Technology (NASDAQ:MCHP)

Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.

Microchip Technology reported revenues of $2.07 billion, up 25.6% year on year, in line with analyst expectations. It was a decent quarter for the company, with very optimistic guidance for the next quarter but an increase in inventory levels.

"Our fiscal second-quarter results exceeded expectations resulting in yet another quarter of strong growth and profitability," said Ganesh Moorthy, President and Chief Executive Officer.

Microchip Technology Total Revenue

The stock is up 22.1% since the results and currently trades at $72.63.

Is now the time to buy Microchip Technology? Access our full analysis of the earnings results here, it's free.

Best Q3: Vishay Intertechnology (NYSE:VSH)

Named after the founder's ancestral village in present-day Lithuania, Vishay Intertechnology (NYSE:VSH) manufactures simple chips and electronic components that are building blocks of virtually all types of electronic devices.

Vishay Intertechnology reported revenues of $924.7 million, up 13.6% year on year, in line with analyst expectations. It was an impressive quarter for the company, with a significant improvement in gross margin and a beat on the bottom line.

Vishay Intertechnology Total Revenue

Vishay Intertechnology had the weakest performance against analyst estimates among its peers. The stock is up 2.52% since the results and currently trades at $21.92.

Is now the time to buy Vishay Intertechnology? Access our full analysis of the earnings results here, it's free.

Weakest Q3: Texas Instruments (NASDAQ:TXN)

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Texas Instruments reported revenues of $5.24 billion, up 12.8% year on year, beating analyst expectations by 1.9%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and an increase in inventory levels.

The stock is up 5.99% since the results and currently trades at $171.88.

Read our full analysis of Texas Instruments's results here.

Sensata Technologies (NYSE:ST)

Originally a temperature sensor control maker and part of Texas Instruments for 60 years, before eventually being spun out, Sensata Technology Holdings (NYSE: ST) is a leading supplier of analog sensors used in industrial and transportation applications, best known for its dominant position in the tire pressure monitoring systems in cars.

Sensata Technologies reported revenues of $1.01 billion, up 7.07% year on year, beating analyst expectations by 1.23%. It was a weaker quarter for the company, with slow revenue growth and a decline in gross margin.

Sensata Technologies had the slowest revenue growth among the peers. The stock is up 4.79% since the results and currently trades at $43.68.

Read our full, actionable report on Sensata Technologies here, it's free.

ON Semiconductor (NASDAQ:ON)

Spun out of Motorola in 1999, and built through a series of acquisitions, ON Semiconductor (NASDAQ: ON) is a global provider of analog chips with specialization in autos, industrial applications, and power management in cloud data centers.

ON Semiconductor reported revenues of $2.19 billion, up 25.8% year on year, beating analyst expectations by 3.57%. It was a very strong quarter for the company, with a significant improvement in gross margin.

ON Semiconductor achieved the strongest analyst estimates beat among the peers. The stock is down 5.19% since the results and currently trades at $63.91.

Read our full, actionable report on ON Semiconductor here, it's free.

The author has no position in any of the stocks mentioned