Memory-chip maker Micron Technology late Thursday missed Wall Street's already lowered expectations for sales in its fiscal fourth quarter and guided much lower for the current quarter. MU stock wavered in extended trading.
The Boise, Idaho-based company earned an adjusted $1.45 a share on sales of $6.64 billion in the quarter ended Sept. 1. Analysts polled by FactSet had predicted Micron earnings of $1.37 a share on sales of $6.73 billion. On a year-over-year basis, Micron earnings fell 40% while sales declined 20%.
For the current quarter, Micron predicted adjusted earnings of 4 cents a share on sales of $4.25 billion. Wall Street had been looking for earnings of 69 cents a share on sales of $5.71 billion in Micron's fiscal first quarter. In the year-earlier period, Micron earned $2.16 a share on sales of $7.69 billion.
"Our technology and manufacturing leadership in both DRAM and Nand, deep customer relationships, diverse product portfolio, and strong balance sheet put Micron on solid footing to navigate the weakened near-term supply-demand environment," Chief Executive Sanjay Mehrotra said in a news release.
MU Stock Seesaws After Report
He added, "We are taking decisive steps to reduce our supply growth including a nearly 50% wafer fab equipment capex cut vs. last year, and we expect to emerge from this downcycle well positioned to capitalize on the long-term demand for memory and storage."
In after-hours trading on the stock market today, MU stock alternated between modest gains and losses. In recent trades, it was down 0.5% to 49.77. During the regular session Thursday, MU stock fell 1.9% to close at 50.01.
MU stock has crashed amid signs that the memory-chip market has entered a cyclical downturn. Micron hit a record high of 98.45 on Jan. 5.
On Aug. 9, Micron warned of weakening demand in the memory-chip market and said its fiscal fourth-quarter sales could be at the low end or below its target range. The company said the "challenging market environment" is likely to persist in its fiscal first quarter as well.
Micron Has Subpar Composite Rating
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 72% of Micron's revenue in its fiscal fourth quarter. Nand flash memory accounted for 25% of its revenue during the period.
MU stock ranks fifth out of 10 stocks in IBD's Computer-Data Storage industry group, according to IBD Stock Checkup. It has a subpar IBD Composite Rating of 45 out of 99.
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