Microchip Technology profit dips in latest quarter

Microchip Technology profit falls but CEO says conditions are improving

• On 8:16 pm EST, Wednesday November 4, 2009

CHANDLER, Ariz. (AP) -- Semiconductor maker Microchip Technology Inc. said Wednesday that earnings and sales fell in the latest quarter, but its CEO said profit margins would improve as the company increases production to meet stronger business conditions.

The company said it earned $44.5 million, or 24 cents per share, in its second fiscal quarter, which ended Sept. 30. The company earned $75.7 million, or 40 cents per share, in the same period last year.

Microchip said that excluding the costs of stock-based compensation, gains and losses from securities trading and other items, it would have earned $53.2 million, or 29 cents per share.

Revenue fell 16 percent from a year ago -- to $226.7 million from $269.7 million -- but rose more than 17 percent compared with the June quarter.

Analysts, who usually exclude items from their forecasts, expected the company to earn 21 cents per share on sales of $218.3 million, according to Thomson Reuters.

CEO Steve Sanghi said the company exceeded sales, margin and profit targets it set in early September due to strength in all geographic areas and product lines. He said profit margins would rise again in the December quarter as the company increases production in response to improving business conditions.

The shares rose 26 cents to $24.41 in regular trading, then added 39 cents, or 1.6 percent, to $24.80 in extended trading after the report.

Buzz up!