Micron CEO Sanjay Mehrotra speaks before President Joe Biden's speech on the CHIPS and Science Act and his Investing in America program at the Milton J. Rubenstein Museum in Syracuse, New York, April 25, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
Micron the company's 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.
Shares fell to $86.78 in early afternoon trading, down about 45% from their all-time high in June.
Micron said it expects fiscal second-quarter revenue of $7.9 billion, plus or minus $200 million, and adjusted earnings per share of $1.43, plus or minus 10 cents. Analysts expected revenue of $8.98 billion and EPS of $1.91, according to LSEG.
In an earnings call, CEO Sanjay Mehrotra said the computer memory and storage company is seeing slower growth in consumer device parts and experiencing “inventory corrections.”
“Micron expects further delays in the PC refresh cycle and reports increased customer inventory on smartphones,” Stifel analysts wrote in a report to clients. The company maintained its buy rating on the stock, but lowered its price target to $130 from $135.
Micron reported earnings growth over the first quarter, with earnings per share of $1.79, beating analysts' average estimate of $1.75. Revenue rose 84% from a year earlier to $8.71 billion, in line with estimates. The growth was driven by a 400% increase in data center revenues, mainly due to demand for artificial intelligence, – said Mikron.
“We continue to gain share in the highest margin and strategically important parts of the market and are uniquely positioned to leverage AI-driven developments to create significant value for all stakeholders,” the company wrote in its report.
TO WATCH: : Micron shares are falling
