(Reuters) -Chipmaker Microchip Technology beat analysts’ estimates for first-quarter net sales and profit on Thursday, helped by customers clearing excess inventory.
However, shares of the company fell 6% in extended trading after it forecast current quarter net sales between $1.11 billion and $1.15 billion, in-line with analysts’ average estimate of $1.13 billion, according to data compiled by LSEG.
PC and smartphone makers accelerated shipments in the first half of the year amid widespread macroeconomic uncertainty spurred by U.S. President Donald Trump’s global tariffs.
This helped demand for Microchip’s products in the period, but future growth for the semiconductor industry in the PC market is uncertain amid ongoing trade negotiations.
Shipments of PCs rose 6.5% in the June quarter, according to data from International Data Corporation.
Microchip reduced overall inventory dollars by $124.4 million in the June quarter, helped by improvements in its manufacturing, allowing for more operational flexibility as demand conditions improved, CEO Steve Sanghi said.
It forecast adjusted net earnings per share of 30 cents to 36 cents for the second quarter, which was above estimates of 31 cents at the mid-point.
The Chandler, Arizona-based company posted net sales of $1.08 billion for the quarter, beating estimates of $1.05 billion.
Excluding items, first-quarter profit per share came in at 27 cents, compared with estimates of 24 cents.
(Reporting by Arsheeya Bajwa and Juveria Tabassum in Bengaluru; Editing by Leroy Leo)
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