Micron CEO Sanjay Mehrotra 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, 25 April, 2024.
Andrew Caballero-Reynolds | AFP| Getty Images
Micron Shares fell 16% on Thursday – 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 $87.09 at the close, down about 45% from its June all-time high.
For the second fiscal quarter, Micron said it 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 were expecting revenue of $8.98 billion and EPS of $1.91, according to LSEG.
On the earnings call, CEO Sanjay Mehrotra said the company, which provides computer memory and storage, is seeing slower growth in consumer device segments and is experience “inventory changes”.
“Micron expects further delays in the PC upgrade cycle and announced pockets of high customer inventory in 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 earnings beat from the first quarter, with earnings per share coming in at $1.79, topping the average analyst estimate of $1.75. Revenue jumped 84% from a year earlier to $8.71 billion, according to estimates. 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 highest margins and strategic segments of the market and are ideally positioned to accelerate AI-driven growth to create substantial value for the all stakeholders,” the company wrote in its report.
