Memory-chip leader Micron Technology late Wednesday roughly matched analyst estimates for its fiscal first quarter but badly missed with its outlook for the current quarter. Micron stock tumbled in extended trading.
The Boise, Idaho-based company earned an adjusted $1.79 a share on sales of $8.71 billion in the quarter ended Nov. 28. Analysts polled by FactSet had expected Micron earnings of $1.76 a share on sales of $8.71 billion. In the year-earlier period, Micron lost 95 cents a share on sales of $4.73 billion.
For the current quarter, Micron expects to earn an adjusted $1.43 a share on sales of $7.9 billion. That's based on the midpoint of its guidance. Wall Street was modeling earnings of $1.91 a share on sales of $8.94 billion in the fiscal second quarter.
In after-hours trading on the stock market today, MU stock plunged more than 13% to 89.53. During the regular session, Micron dropped 4.3% to close at 103.90.
Micron said its fiscal Q1 results were driven by strong demand for memory chips for AI servers. Its data center revenue increased more than 40% sequentially and over 400% year over year.
Data Center Now Over Half Of Sales
"Micron delivered a record quarter, and our data center revenue surpassed 50% of our total revenue for the first time," Chief Executive Sanjay Mehrotra said in a news release.
He added, "While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year. We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders."
Micron makes two main types of computer memory: DRAM and Nand. DRAM chips act as the main memory in PCs, servers and other devices, working closely with central processing units. Nand flash memory provides longer-term data storage.
MU stock ranks third out of nine stocks in IBD's Computer-Data Storage industry group, according to IBD Stock Checkup. Micron has an IBD Composite Rating of 78 out of 99.
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