Sanjay Mehrotra, CEO of Micron, speaks before US President Joe Biden delivers remarks on “How the CHIPS Act, Science and His Investing in America Agenda is Growing the Economy and Creating Jobs,” at the Milton J. Rubinstein Museum in Syracuse, New York, on April 25, 2024.
Andrew Caballero Reynolds | AFP | Getty Images
Micron Shares fell 16% on Thursday — heading 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 the fiscal second 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 earnings per share 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 parts of consumer devices and seeing “inventory adjustments.”
“Micron expects further delays in the PC update cycle and cited high customer inventory in smartphones,” analysts at Stifel wrote in a report to clients. The company maintained a buy rating on the stock but lowered its price target to $130 from $135.
Micron reported first-quarter earnings beats, with EPS of $1.79, beating analysts' average estimate of $1.75. Revenue jumped 84% from the previous year to $8.71 billion, which was in line with estimates. This growth was driven by a 400% increase in data center revenues, largely due to demand for artificial intelligence. Micron said.
“We continue to capture share in the highest margin and strategically important segments of the market, and we are exceptionally well positioned to leverage AI-driven growth to create significant value for all stakeholders,” the company wrote in its report.
He watches: Micron shares fall
