2024-12-19 20:41:00
Sanjay Mehrotra, CEO of Micron, speaks before President Joe Biden delivers remarks on the CHIPS and Science Act and his Investing in America agenda, at the Milton J. Rubenstein Museum in Syracuse, New York, April 25, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
Micron Shares tumbled 16% on Thursday – on track for their worst day since March 2020 and the start of the Covid pandemic – after the chipmaker issued disappointing second-quarter guidance in its earnings report.
The stock fell to $86.78 in early afternoon trading, down about 45% from its all-time high in June.
For its second fiscal quarter, Micron expects revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings per share of $1.43, plus or minus 10 cents. Analysts had expected revenue of $8.98 billion and earnings per share of $1.91, according to LSEG.
During the earnings call, CEO Sanjay Mehrotra said the company, which provides computer memory and storage, is seeing slower growth in parts of consumer devices and is experiencing “inventory adjustments.”
“Micron expects further slowdown in the PC refresh cycle and cites an increase in customer inventory on smartphones,” analysts at Stifel wrote in a report to clients. The company maintained its buy rating on the stock, but lowered its price target to $130 from $135.
Micron reported an improvement in earnings from the first quarter, with earnings per share of $1.79, higher than the average analyst estimate of $1.75. Revenue rose 84% from a year earlier to $8.71 billion, in line with expectations. The growth was driven by a 400% increase in data center revenue, largely due to demand for artificial intelligence. Micron said.
“We continue to gain share in the strategically important, highest-margin parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders,” the company said in its report.
WATCH: Micron shares plummet
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