Shares of computer components developer Microchip Technology Inc.
MCHP,
fell after hours on Monday after the company said it expected fiscal third-quarter sales to fall more than it once expected, citing a “weakening economic environment.” The company — whose products help power things like data centers, connected devices and cars — said it expected sales for that quarter to fall 22% from the prior quarter, compared to earlier expectations for a 15% to 20% drop. Shares fell 4.3% after hours. “The weakening economic environment that our customers and distributors faced during the December 2023 quarter resulted in many of them wanting to receive a lower level of shipments as they took actions to further de-risk their inventory positions,” Chief Executive Ganesh Moorthy said in a statement. “Many customers also had extended shutdowns or closures at the end of the December quarter as they managed their operational activities,” he continued. “The impact of these and related factors was that certain backlog that we had planned to ship when we provided our guidance on November 2, 2023 did not ship to customers before the end of the December quarter.” The company reports full quarterly results on Feb. 1.
