Microchip Technology (NASDAQ:MCHP) shares fell nearly 3% in pre-market today after the company provided fiscal Q1/25 guidance that fell short of analyst expectations. In fiscal Q4/24, Microchip reported earnings per share (EPS) of $0.57 and revenue of $1.33 billion, both aligning with consensus estimates.

However, the company forecasts EPS for the first quarter of 2025 to range from $0.48 to $0.56, below analyst projections of $0.57. Similarly, it expects revenue for the quarter to be between $1.22 billion and $1.26 billion, missing the anticipated $1.34 billion.

Ganesh Moorthy, Microchip's President and CEO, noted that a significant inventory correction in fiscal 2024 led to a 9.5% revenue decline, down to $7.6 billion. Despite these challenges, the company's resilient operating model helped maintain a non-GAAP operating margin of 43.9%. Moorthy emphasized the company’s commitment to its capital return program, which returned $1.89 billion through dividends and share buybacks in fiscal 2024, a 15.4% increase from the previous year. Microchip is on track to return 100% of adjusted free cash flow to shareholders by the end of the current fiscal year.