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Micron CEO Sanjay Mehrotra speaks before President Joe Biden delivers remarks on the CHIPS Act and Science and his Investing in America agenda at the Milton J. Rubenstein Museum in Syracuse, New York, on 25 April 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 posted disappointing second-quarter guidance in its earnings report.
The stock fell to $87.09 at the close, about 45% from its June high.
For the second fiscal 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 EPS 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 has experienced “inventory adjustments.”
“Micron expects a further delay in the PC refresh cycle and cited pockets of high customer inventory in smartphones,” Stifel analysts wrote in a report to clients. The firm maintained its buy rating on the stock, but lowered its price target to $130 from $135.
Micron reported earnings beat from the first quarter, with earnings per share coming in at $1.79, beating the average analyst estimate of $1.75. Revenue jumped 84% from a year earlier to $8.71 billion, meeting estimates. Growth was driven by a 400% increase in data center revenue due in large part to demand for artificial intelligence, Micron said.
“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,” the company wrote in its report. .
WATCH: : Micron’s stock is falling
