I will comment on our third quarter of fiscal year 2012 financial performance, and Steve and Ganesh will then give their comments on the results, discuss the current business environment and discuss our guidance. We will then be available to respond to specific investor and analyst questions.
We are including information in our press release in this conference call on various GAAP and non-GAAP measures. We have posted a full GAAP to non-GAAP reconciliation on the Investor Relations page of our website at www.microchip.com, which we believe you will find useful when comparing GAAP to non-GAAP results.
I will now go through some of the operating results. I will be referring to gross margin and operating expense information on a non-GAAP basis prior to the effects of share base compensation and acquisition-related expenses.
Net sales in December quarter were $329.2 million and were down sequentially 3.4% from net sales of $340.6 million in the immediately preceding quarter and were down 10.5% from net sales of $367.8 million in the December 2010 quarter. Looking at revenue by geography for the December quarter, Americas were down 3.4% sequentially, Europe was down 15.3% sequentially and Asia was up 1.9% sequentially. All geographies were impacted by the weak economic and industry conditions we experienced, with Asia being the strongest and Europe being the weakest as compared to our expectations.Our non-GAAP results were in line with our quarterly guidance provided on November 3, 2011. On a non-GAAP basis, gross margins were 56.8% in the December quarter, and non-GAAP operating expenses were 26.3% of sales. Operating income was 30.5% of sales, and net income was $85.4 million or $0.42 per diluted share. On a full GAAP basis, gross margins, including share-based compensation and acquisition-related intangible amortization, were 55.8% in the December quarter. Total operating expenses were $95.7 million or 29.1% of sales and includes share-based compensation of $8.6 million, acquisition-related expenses of $1.2 million and $0.7 million of special income associated with acquisitions from prior years. GAAP net income of $77.5 million or $0.38 per diluted share and was favorably impacted by $4.1 million of nonrecurring tax events.
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