The technology sector saw a significant shift as Microchip Technology (NASDAQ:MCHP) experienced a nearly 5% drop in after-hours trading following the release of fiscal Q1 2025 guidance that fell below analysts’ expectations. In the fiscal Q4 2024 report, Microchip posted an earnings per share (EPS) of $0.57, in line with consensus estimates, with quarterly revenue reaching $1.33 billion, also meeting projections.

However, the outlook for the first quarter of 2025 indicates an EPS range of $0.48 to $0.56, below the anticipated $0.57, and revenue between $1.22 billion and $1.26 billion, missing the expected $1.34 billion. Additionally, the company’s Board of Directors announced a quarterly cash dividend of 45.2 cents per share on its common stock, payable on June 5, 2024, to shareholders on record as of May 22, 2024.

Ganesh Moorthy, President and CEO of Microchip, highlighted the challenges faced in fiscal 2024 due to a significant inventory correction, resulting in a 9.5% revenue decline to $7.6 billion. Despite this, the company’s adaptable operating model and swift response to market conditions led to a non-GAAP operating margin of 43.9%. Moorthy emphasized the commitment to the capital return program, with $1.89 billion returned to shareholders through dividends and share buybacks in fiscal 2024, a 15.4% increase from the previous year, aiming to return 100% of adjusted free cash flow to shareholders by the end of the current fiscal year.