Micron Technology gives disappointing guidance as supply chain issues impact customers
Micron CEO says shipments will 'decline modestly' in the near term
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Micron Technology Inc. shares were under modest pressure Wednesday after the chipmaker issued disappointing guidance due to weaker demand from customers.
PC makers warned the company that supply chain disruptions for other parts would result in a reduced need for chips, which have suffered through their own production issues amid the reopening of the global economy from COVID-19 restrictions.
Shares of the Boise, Idaho-based Micron fell more than 3% in early trading and were flirting with their lowest close in nine months.
Ticker | Security | Last | Change | Change % |
---|---|---|---|---|
MU | MICRON TECHNOLOGY INC. | 89.39 | +0.10 | +0.11% |
"In the near term, our FQ1 bit shipments will decline modestly in both DRAM and NAND from very strong levels in FQ4," said Micron CEO Sanjay Mehrotra on the company’s fourth-quarter earnings call on Tuesday evening.
"Some PC customers are adjusting their memory and storage purchases due to shortages of non-memory components that are needed to complete PC builds," he added. "We expect this adjustment at our PC customers to be largely resolved in the coming months."
Micron, as a result of the drop in PC customer demand, issued quarterly sales guidance for the three months ending in November of about $7.65 billion compared with the $7.7 billion expected by analysts surveyed by Refinitiv.
Adjusted quarterly profit is anticipated to be between $2 and $2.10 per share versus the Wall Street consensus of $2.18.
Still, the company expects strong demand in 2022 with plans to deliver "record revenue with solid profitability," according to Mehrotra.
Micron reported fiscal fourth-quarter net income of $2.72 billion, or $2.39 a share, up from $988 million in the year-ago period. Revenue rose 37% year over year to $8.27 billion.
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Shares were down 2.77% this year through Tuesday while the S&P 500 was up 16%.