CHANDLER, Ariz.--Microchip Technology Inc. today said it will report higher-than-expected net sales and earnings for the company's fiscal fourth quarter, which ended March 31. Net sales are now expected to be 5% higher than the previous quarter, at $148.5 million, said the company.

Earnings per share in the fiscal fourth quarter are expected to be $0.19 per share, an increase from $0.12 per share in the prior quarter, Microchip said. Until today, financial analysts were anticipating earnings of $0.18 per share, according to a survey by First Call/Thomson Financial.

"The tone of our business was strong all quarter, with March being an exceptional month," said Steve Sanghi, president and CEO of Microchip. "Order visibility substantially improved during the March quarter, with bookings up approximately 35% from the immediately preceding quarter, and our book-to-bill ratio exceeding parity for the first time in six quarters.

"Further evidence of improving visibility is our current expectation that we will require lower turns orders in the June quarter (56%) than the March quarter (62%) to achieve our revenue targets," said the chief executive officer, referring to orders delivered in the same quarter as they were booked. "We believe this improvement in visibility marks a turning point for Microchip," he added.

Last month, Microchip announced it had begun ramping production in Chandler and Tempe, Ariz., with a moderate increase of wafer starts (see March 12 story). Today, Sanghi said capacity utilization at these facilities is expected to increase to 80% in the current quarter vs. 70% in the March period.

"We anticipate that this capacity increase should translate to gross margins of 51.5% in the June quarter, up almost 100 basis points from the March quarter," he said. "We are also increasing our guidance for net sales for the June quarter to approximately $156 million, or up 5% from the March quarter. Earnings per share, based on these assumptions, are anticipated to be 21 cents, up over 10% from the March quarter."

Microchip is scheduled to release its full results for the fiscal fourth quarter on April 25. An analyst call will be hosted by the company on Tuesday.