(Reuters) – Chipmaker Microchip Technology forecast fourth-quarter net sales below Wall Street estimates on Thursday, anticipating weak demand from customers as they clear excess inventory.
Shares of the Chandler, Arizona-based company fell more than 3% in extended trading.
Demand for auto chips has been slowing as customers are dealing with excess inventory, hitting chipmakers such as Microchip Technology in an uncertain economy.
“We are cautious about demand in the near term given the weak macro environment and customers’ ongoing actions to reduce inventory,” CEO Ganesh Moorthy said.
“As a result, we intend to have two-week shutdowns in our large wafer fabrication facilities in each of the March and June quarters and reduced activity in many of our other factories, resulting in underutilization charges,” Moorthy added.
Last month, its peer Texas Instruments forecast first-quarter revenue and profit below estimates, as early signs of weakness in the automotive sector add to worries over a persistent supply glut in its industrial markets.
Similarly, Israel-based firm Mobileye Global forecast preliminary 2024 revenue below estimates, with a pullback in orders from its customers clearing excess inventory.
Microchip expects net sales in the range of $1.23 billion to $1.43 billion for the fourth quarter ending in March, below analysts’ average estimate of $1.66 billion, according to LSEG data.
It expects fourth-quarter adjusted profit per share between 33 cents and 36 cents, compared with estimates of 92 cents.
The company posted net sales of $1.77 billion for the three months ended Dec. 31, in line with analysts’ estimates. Excluding items, its third-quarter adjusted profit per share was $1.08, compared with estimates of $1.04.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Krishna Chandra Eluri)
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