Micron shares slide after revenue forecast fails to top estimates

Micron
shares
fell
about
7%
in
extended
trading
on
Wednesday
as
investors
looked
past
better-than-expected
results
and
focused
instead
on
a
revenue
forecast
that
was
in
line
with
estimates.

Here’s
how
the
company
did
versus
LSEG
consensus
estimates
for
the
fiscal
third
quarter
ended
May
30:

• 
  Earnings
  per
  share:
  62
  cents
  adjusted
  vs.
  51
  cents
  expected
• 
  Revenue:
  $6.81
  billion
  vs.
  $6.67
  billion
  expected

Micron,
which
makes
computer
memory
and
storage,
said
it
expects
adjusted
earnings
per
share
of
$1.08
on
revenue
of
$7.6
billion
in
the
current
quarter.
Analysts
were
expecting
earnings
per
share
of
$1.05
on
revenue
of
$7.6
billion.

The
shares
have
more
than
doubled
in
the
past
year
as
the
company
rides
the
artificial
intelligence
boom.
Micron’s
most
advanced
memory
is
needed
for
AI
graphics
processing
units
(GPUs)
like


Nvidia’s,
putting
the
company
in
position
to
benefit
from
demand
for
technology
to
train
and
deploy
AI
applications
like
OpenAI’s
ChatGPT.

Micron
reported
$332
million
in
net
income,
or
30
cents
per
share,
versus
a
net
loss
of
$1.9
billion,
or
$1.73
per
share,
in
the
year-ago
quarter.

Micron
CEO
Sanjay
Mehrotra
highlighted
the
company’s
AI
business
in
a
statement
while
saying
that
its
smartphone
and
PC
markets
remain
sluggish.

Mehrotra
said
the
company’s
AI-oriented
products
were
likely
to
increase
in
price
and
that
the
company’s
data
center
business
grew
50%
on
a
quarter-to-quarter
basis.

“Robust
AI-driven
demand
for
data
center
products
is
causing
tightness
on
our
leading-edge
nodes,”
Mehrotra
said
in
a
statement.
“Consequently,
we
expect
continued
price
increases
throughout
calendar
2024
despite
only
steady
near-term
demand
in
PCs
and
smartphones.”

On
a
call
with
analysts,
Micron
said
that
its
high
bandwidth
memory,
the
kind
used
in
AI
chips,
is
sold
out
through
2025.

“We
believe
that
Micron
will
be
one
of
the
biggest
beneficiaries
in
the
semiconductor
industry
in
the
multiyear
growth
opportunity
driven
by
AI,”
Mehrotra
said.

WATCH:

Micron
CEO
on
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Act
grant