Earnings Outlook For Microchip Technology

On Thursday, February 04, Microchip Technology MCHP will release its latest earnings report. Here is Benzinga's outlook for the company.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Sell-side analysts expect Microchip Technology's EPS to be near $1.58 on sales of $1.36 billion. In the same quarter last year, Microchip Technology posted EPS of $1.32 on sales of $1.29 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to report earnings in line when it publishes results Thursday, quarterly profit would be up 19.7%. Revenue would be up 5.67% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Microchip Technology were trading at $143.92 as of February 02. Over the last 52-week period, shares are up 32.02%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Microchip Technology is scheduled to hold the call at 17:00:00 ET and can be accessed here.