Microchip Tech: Atmel's Performance 'Disappointing'

Microchip Technology Inc. on Monday said it expected sales and earnings from recently acquired Atmel Corp. to be "significantly lower" in its latest quarter than the one prior.

Microchip said Monday that it had completed the buyout of the California-based semiconductor maker in a $3.6 billion deal.

The chip maker said it expected Atmel's net sales to be in the range of $219 million to $221 million in the quarter ended March 31, which would be a 16% decline compared with the quarter ended Dec. 31. The results of the company will be consolidated together in the future.

"The performance of Atmel since we engaged in discussions in August of 2015 has been disappointing," said Steve Sanghi, CEO of Microchip. "We believe that the large drop in Atmel revenue in the March 2016 quarter is likely the result of an inventory correction in the distribution channel as distributors reduced inventory levels, overall weak business conditions, and concerns on the part of distributors surrounding the impact of the sale of Atmel to Microchip."

Microchip also said it expects net sales for its fiscal fourth quarter ended March 31 to be between the midpoint and high end of guidance of $552 million to $568.5 million. The company also said it expected adjusted earnings on a per-share basis would also come in near the high end of guidance of 65 cents to 69 cents.

Microchip is slated to report its results early next month.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

April 04, 2016 19:25 ET (23:25 GMT)

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