Micron is having its worst day since 2020 after disappointing guidance
Sanjay Mehrotra, CEO of Micron, before President Joe Biden delivers remarks on CHIPS and the Science Act and the 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 fell 16% on Thursday – their worst day since March 2020 and the start of the Covid pandemic – after the chipmaker gave disappointing guidance for the second quarter in its earnings report.
Shares fell to $87.09 at the close, down nearly 45% from their June all-time high.
For the fiscal second quarter, Micron said it expected revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings of $1.43 per share, plus or minus 10 cents. Analysts were expecting $8.98 billion in revenue and $1.91 EPS, according to LSEG.
On the earnings call, CEO Sanjay Mehrotra said the computer memory and storage company is seeing slower growth in consumer device parts and is experiencing “inventory adjustments.”
“Micron expects further delays in the PC refresh cycle, citing pockets of high customer inventory in smartphones,” Stifel analysts wrote in a note to clients. The firm maintained a buy rating on the stock but lowered its price target to $130 from $135.
Micron reported a decline in earnings from the first quarter, with earnings per share of $1.79, beating the average analyst estimate of $1.75. Revenue was up 84% year-over-year to $8.71 billion. The growth was driven by a 400% increase in data center revenues, mainly due to demand for artificial intelligence. Micron said.
“We continue to gain share in the highest-margin and strategically important segments of the market and are extremely well-positioned to leverage AI-driven growth to create significant value for all stakeholders,” the company wrote in its report.
SEE: Micron shares fell
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