May 7 (Reuters) – Microchip Technology forecast first-quarter revenue above estimates on Thursday, betting on strong demand for its chips used in industrial and automotive sectors.
Shares of the Chandler, Arizona-based company rose more than 2% in extended trading.
The company has benefited from a cyclical recovery in key end-markets including industrial and automotive, as well as surging demand from artificial intelligence data centers.
Robust spending in the aerospace and defense markets, fueled by geopolitical tensions and increased government budgets, has also provided a stable source of revenue growth.
Microchip expects first-quarter revenue between $1.44 billion and $1.47 billion, above analysts’ average estimate of $1.34 billion, according to data compiled by LSEG.
Adjusted profit per share is expected to be between 67 cents and 71 cents, above estimates of 59 cents.
“We are seeing strong customer engagement and expanding design activity in data center and AI applications, driven by the breadth and performance of our high-speed connectivity and compute portfolio,” Chief Operating Officer Rich Simoncic said in a statement.
Peer Onsemi also forecast quarterly revenue above estimates on Monday, betting on demand for its chips as the automotive industry recovers.
For the fourth quarter, Microchip reported revenue of $1.31 billion, beating estimates of $1.26 billion. Adjusted profit came in at 57 cents per share, compared with estimates of 51 cents per share.
(Reporting by Anhata Rooprai in Bengaluru; Editing by Sahal Muhammed)
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