Micron Misses Quarterly Targets Amid Memory-Chip Sales Slump

Memory-chip maker Micron Technology (MU) late Wednesday missed estimates for its fiscal first quarter amid a cyclical downturn. It also predicted results that were much lower than what analysts expected for the current quarter. MU stock slid in extended trading.

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The Boise, Idaho-based company lost an adjusted 4 cents a share on sales of $4.09 billion in the quarter ended Dec. 1. Analysts polled by FactSet had expected Micron to lose 2 cents a share on sales of $4.13 billion. In the year-earlier period, Micron earned $2.16 a share on sales of $7.69 billion.

For the current quarter, Micron predicted an adjusted loss of 62 cents a share on sales of $3.8 billion. Wall Street was expecting for a loss of 32 cents a share on sales of $3.92 billion in Micron’s fiscal second quarter. In the year-earlier period, Micron earned $2.14 a share on sales of $7.79 billion.

On Nov. 16, Micron disclosed that it was slashing production of memory chips, citing weak demand. It also announced plans to cut capital expenditures.

MU Stock Sinks After Report

In after-hours trading on the stock market today, MU stock fell 1% to 50.69. During the regular session Wednesday, MU stock rose 1% to close at 51.19.

“Micron delivered fiscal first-quarter revenue and (per-share earnings) within guidance ranges despite challenging conditions during the quarter,” Chief Executive Sanjay Mehrotra said in a news release. “Micron’s strong technology, manufacturing and financial position put us on solid footing to navigate the near-term environment, and we are taking decisive actions to cut our supply and expenses.”

He added, “We expect improving customer inventories to enable higher revenue in the fiscal second half, and to deliver strong profitability once we get past this downturn.”

Micron makes two main types of memory chips: DRAM and Nand. DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. Nand flash provides longer-term data storage.

Dynamic random-access memory, or DRAM, accounted for 67% of Micron’s revenue in its fiscal first quarter. Nand flash memory accounted for 27% of its revenue during the period.

MU stock hit its all-time high of 98.45 on Jan. 5.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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