Shares of Microchip Technology Corp. shot up to a six-month high Wednesday, after the semiconductor maker provided a downbeat provided outlook for the current quarter, but Chief Executive Steve Sanghi said he believes that will mark the bottom for the company. And he’s been spot on before. Microchip MCHP, -0.75% reported late Tuesday fiscal third-quarter results that beat expectations, despite a “variety” of headwinds for the chip industry and the global economy, which included trade tensions between the U.S. and China. Given the uncertainty surrounding the trade environment, Sanghi said he continues to be “cautious” about the outlook for the current quarter ending March. And as a result, the company’s guidance range for adjusted earnings per share for the March quarter was $1.26 to $1.53, below the FactSet consensus as of Jan. 31 of $1.54. Sales were projected to be between $1.251 billion and $1.403 billion, compared with the FactSet consensus as of Jan. 31 of $1.39 billion. The stock initially fell after the results were released, as much as 1.5% in after-hours trade Tuesday, before turning sharply higher after the post-earnings conference call began. “Barring any material negative development on the trade front, we see the March 2019 quarter to mark the bottom of the cycle for Microchip,” Sanghi said on the call, according to a transcript provided by FactSet. He said whether the recovery is V-shaped, U-shaped or L-shaped will depend somewhat on the outcome of trade talks. Sanghi said that while he expects some progress in trade talks, it’s likely that the March 1 deadline, after which increased tariffs would kick in, will be extended further out. Either way, Sanghi sees “a bottom forming,” and repeated his belief that the current quarter will “mark the bottom” for the company. He reminded analysts on the call that the guidance provided later last year, which reflected caution on business conditions, turned out to be “spot on” and was also a harbinger for broader industry weakness. The stock ran up 7.3% to the highest close since Aug. 9, 2018. It has now soared 24% since the start of the year, and has rocketed 46% since closing at a 2-year low of $61.30 on Oct. 24. Analyst Kevin Cassidy at Stifel Nicolaus reiterated his buy rating on Microchip’s stock, saying Sanghi has been right with his “bold” predictions in the past. “In our view, Mr. Sanghi’s predictions have been accurate, including, most famously, calling a weakness in the U.S. housing market in July 2007 followed by calling the bottom to the ‘great recession’ in February 2009,” Cassidy wrote in a note to clients. “While Mr. Sanghi restricts his forecasts to Microchip’s business only, we expect many will view this call as positive for the semiconductor industry.” The PHLX Semiconductor Index SOX, -0.11% surged 2.6% to a 4-month high, and has now rallied 25% off the 16-month closing low on Dec. 24. Among the SOX’s other more-active components, shares of Micron Technology Inc. MU, -2.03% rallied 5.5% and Nvidia Corp. NVDA, +0.51% advanced 2.0%, while Intel Corp. INTC, -0.79% slipped 0.2%, while Advanced Micro Devices Inc. AMD, +1.68% eased 0.2%. Meanwhile, the S&P 500 index SPX, +0.07% fell 0.2% on Wednesday, but has climbed 16% since closing at a 20-month low on Dec. 24. Raymond James analyst Chris Caso said Microchip was among the first chip companies to indicate weakness back in August, and now they are among the first to call the bottom. “Management accepted that there would likely be a skeptical reaction to their commentary, but we’re not going to violently disagree, since many prior cycles have bottomed after 2 down quarters,” Caso wrote. But given the uncertainty of the trade situation, Caso kept his rating on the stock at market perform. Separately, Microchip reported late Tuesday that for the fiscal third quarter ended Dec. 31 it swung to net income of $49.2 million, or 20 cents a share, from a loss of $251.1 million, or $1.07 a share in the same period a year ago, which included significant one-time adjusted related to tax reform. Excluding nonrecurring items, adjusted earnings per share rose to $1.66 from $1.36, beating the FactSet consensus of $1.57. Sales rose 38% to $1.38 billion, while adjusted sales, which reflects new required revenue recognition standards, increased 42% to $1.42 billion to top expectations of $1.40 billion. Get the top tech stories of the day delivered to your inbox. Subscribe to MarketWatch's free Tech Daily newsletter. Sign up here.