Microchip Technology Inc (NASDAQ:MCHP) stock fell 2.04% (As on November 6, 11:31:52 AM UTC-4, Source: Google Finance) after the company forecast third-quarter revenue and profit below estimates, indicating a sluggish demand from automotive customers amid economic uncertainty. Non-GAAP net income for the second quarter of fiscal 2025 was $250.2 million, down from non-GAAP net income of $889.3 million in the prior year’s second fiscal quarter. The Total System Solutions approach is driving strong execution and seeing growing adoption in AI-accelerated servers in the data center markets. The PCIe switches, SSD controllers, CXL solutions, and associated power and timing products are key to continuing to strengthen our data center portfolio. The revenue, gross profit and non-GAAP gross profit were positively impacted by a $13.3 million legal settlement. This settlement also positively impacted GAAP and non-GAAP EPS by $0.02 per diluted share. The company continued to navigate through an inventory correction that’s occurring in the midst of macro weakness for many manufacturing businesses, accentuated by heightened weakness in our European business which is concentrated with Industrial and Automotive customers.

MCHP in the second quarter of FY 25 has reported the adjusted earnings per share of 46 cents, beating the analysts’ estimates for the adjusted earnings per share of 43 cents. The company had reported the adjusted revenue decline of 48.4 percent to $1.16 billion in the second quarter of FY 25, beating the analysts’ estimates for revenue of $1.15 billion. On a Non-GAAP basis: gross profit of 59.5% and operating income of $340.8 million and 29.3% of net sales.

Additionally, the company has declared a quarterly cash dividend on its common stock of 45.5 cents per share. The dividend is payable on December 6, 2024, to stockholders of record on November 22, 2024. The company has returned approximately $261.0 million to stockholders in the September quarter through dividends of $243.7 million and the repurchase of $17.3 million, or 0.2 million shares of our common stock, at an average price of $76.86 per share under the previously announced $4.0 billion stock buyback program

The company forecast net sales between $1.03 billion and $1.10 billion for the third quarter ending in December, compared with analysts’ average estimate of $1.18 billion, according to data compiled by LSEG. It expects quarterly adjusted profit per share between 25 cents and 35 cents, compared with estimates of 46 cents.