Shares in Microchip Technology (MCHP) surged 7.4% after-hours on Tuesday, after the company boosted its guidance for net sales and earnings for the 2021 fiscal first quarter as Covid-19 disruptions ease.Microchip now expects consolidated net sales for the June quarter to be $1.247 billion – $1.326 billion, or between flat and down 6% sequentially. That’s versus prior guidance of $1.194 billion – $1.3 billion (down between 2% and 10%).GAAP earnings per share is now expected to be between $0.25 and $0.39 and non-GAAP earnings per share is expected to be between $1.35 and $1.53. The original guidance for GAAP earnings per share was $0.13 to $0.31 with non-GAAP at $1.25 to $1.45.“With two months of the quarter behind us, our business is performing better than we expected during our May 7, 2020 earnings conference call. COVID-19 related supply chain disruptions which were primarily in Malaysia and Philippines have eased. We have begun to make up for lost production and expect to continue to gain ground through the end of this quarter,” cheered Steve Sanghi, Microchip’s CEO.“Our customers’ factories in China are fully back to work. Some of our other customers’ factories in Europe and North America have also started to reopen, including automotive factories where we saw the largest demand destruction,” he added.Shares in Microchip are currently trading down 7% year-to-date. However the stock boasts a bullish Strong Buy analyst consensus, with both Mizuho Securities and Rosenblatt reiterating their buy ratings on June 2. (See MCHP stock analysis on TipRanks.)Mizuho’s Vijay Rakesh also ramped up his MCHP price target from $92 to $105 (8% upside potential), citing improving auto-industrial and 5G base station trends after a challenging few months.“We continue to believe MCHP can leverage costs and achieve its target 63% GMs over time, and its broad customer base and product mix are competitive advantages as a potential 2H re-opening positions well from depressed levels” he wrote.Related News: AMD Can Keep the Rally Alive, Says Top Analyst Lyft Rises 5% After-Hours On Strong May Performance MongoDB Earnings Preview: Analysts Looking For Beat, Raise Quarter More recent articles from Smarter Analyst: * Glu Mobile Sinks On $100M Public Offering Announcement * Zoom Lifts Full-Year Sales Guidance As Quarterly Revenue Balloons 169% * Cheesecake Factory Spikes After-Hours As 75% Sales Recaptured * Lyft Rises 5% After-Hours On Strong May Performance

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(Bloomberg) — Tiffany & Co. plunged after Women’s Wear Daily reported LVMH’s deal to buy the luxury jewelry company is uncertain as the U.S. economy faces widespread upheaval.LVMH board members arranged to meet on Tuesday to discuss the proposed deal, WWD reported, citing unidentified individuals. Board members are concerned about the Covid-19 pandemic that has disrupted the U.S. economy and growing unrest over police violence, WWD said. They also expressed concern about Tiffany’s ability to cover its debt covenants at the end of the transaction.Tiffany’s representatives didn’t immediately respond to a request for comment from Bloomberg. LVMH declined to comment. The French company’s shares rose 0.8% in early Paris trading Wednesday.Tiffany shares, which were halted for several minutes due to volatility, fell as much as 13%, the steepest intraday drop since 2015, before closing down 8.9% on Tuesday.“I would imagine it is normal that LVMH internally discusses the proposed Tiffany acquisition — given the size of the deal, the Covid-19 situation, and the recent social unrest in the U.S.,” wrote Luca Solca, an analyst at Sanford C. Bernstein. “Having said that, the Tiffany takeover would provide a unique strategic opportunity to LVMH, boosting its position in branded jewelry.”Solca said it’s an “open question” whether LVMH would try to renegotiate better terms.The economic fallout from the pandemic has disrupted or derailed a number of prominent deals, including L Brands Inc.’s agreement to sell a majority stake in Victoria’s Secret to private-equity firm Sycamore Partners. If the LVMH-Tiffany tie-up falls apart, it would be one of the largest so far related to Covid-19.The New York-based jeweler website says, as of June 1, its stores are temporarily closed until further notice. The pandemic has also impacted the company’s ability to offer next-day and express shipping.The stores went dark in mid-March due to the pandemic shutdown. Some of its locations have had their windows boarded up as protests roil cities across the country.LVMH’s planned purchase of Tiffany for more than $16 billion has been the subject of speculation after the coronavirus pandemic suddenly altered the consumer landscape across the globe.For LVMH, the deal originally made a lot of sense: buying U.S.-based Tiffany would help the Louis Vuitton owner challenge Cartier owner Richemont for dominance in the global jewelry business. But as Americans curb discretionary spending and retail stores temporarily close their doors, growing exposure to the U.S. market doesn’t have quite the same appeal as it did when the tie-up was announced last November.Prior to the virus lockdown, the 183-year-old Tiffany was struggling with a lull in international tourist traffic and civil unrest in Hong Kong. In the U.S., management has worked to attract younger clientele, though sales have been slow to rebound. Chief Executive Officer Alessandro Bogliolo made China a priority, counting on the market as a growth engine.(Updates with LVMH shares in third paragraph, analyst comment in fifth)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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