Micron Technology Inc. said late Thursday that customers may have loaded up on chips during the shortage because the memory-chip maker predicted a poor outlook after earnings that topped expectations.
Micron MU expects to have adjusted fourth-quarter net income of $1.43 to $1.83 a share on revenue of $6.8 billion to $7.6 billion. The analysts had forecast $2.60 a share on revenue of $9.15 billion.
Sanjay Mehrotra, Micron's chief executive, said recently that the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023. We are confident in the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance. Micron shares, which had fallen as much as 5% after hours, were down 1% last week after a 1.3% decline in the regular session to close at $55.28.
The Boise, Idaho-based chip maker reported net income of $2.63 billion, or $2.34 a share, compared to $1.74 billion, or $1.52 a share in the year-ago period. The adjusted earnings, which exclude stock-based compensation expenses and other items, were $2.59 a share, compared to $1.88 a share in the year-ago period.
Revenue rose to $8.64 billion from $7.42 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $2.43 a share on revenue of $8.64 billion, based on Micron's forecast of $2.36 to $2.56 a share on revenue of $8.5 billion to $8.9 billion.
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Micron specializes in memory chips, NAND and DRAM. DRAM, or dynamic random access memory, is the type of memory most commonly used in PCs and servers, while NAND chips are the flash memory chips used in smaller devices like smartphones and USB drives. Like most semiconductors, memory chips have been in great demand during the COVID- 19 pandemic, but analysts are beginning to see signs that demand is easing and customer inventories are building.
Micron shares have dropped 35% over the past 12 months, while the PHLX Semiconductor Index SOX has shed 12%, the S&P 500 Index SPX has fallen 12%, and the tech-heavy Nasdaq Composite Index COMP dropped 24%.