"Management declared the March quarter a revenue bottom, the first such call after nearly three years of declining sales. Revenue came in at $971 million, down 27% year over year but with encouraging demand signals. The book-to-bill ratio reached 1.07, the first healthy reading in years, and CEO Steve Sanghi noted April bookings exceeded any month in the March quarter."
"Watch whether management can deliver on the margin leverage story. Last quarter's gross margin of 52% included $54.2 million in underutilization charges, and CFO Eric Bjornholt said those costs would remain elevated this quarter. The key question is whether revenue growth can offset these headwinds enough to show meaningful operating profit expansion. Look at the September quarter guidance. Sanghi said September backlog is higher than where June was at the same point, suggesting momentum is building."
Microchip reported March-quarter revenue of $971 million, down 27% year over year, and declared the March quarter a revenue bottom after nearly three years of declining sales. The book-to-bill ratio reached 1.07 and April bookings exceeded any month in the March quarter. Inventory fell to 251 days from 266 days, with plans to free over $350 million and a long-term target of 130–150 days. June-quarter revenue guidance is $1.045 billion, implying a $74.5 million sequential increase with most flowing to operating profit. Gross margin was 52% with $54.2 million in underutilization charges expected to remain elevated. September backlog is higher than June at the same point, and aerospace and defense now comprise about 17–18% of revenue.
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