Micron Technology Shares Lower As Guidance Disappoints
July 01 2022 - 11:38AM
Dow Jones News
By Michael Dabaie
Micron Technology Inc. shares fell 5.8% to $52.08 in Friday
trading after guidance missed analyst views.
The memory and storage solutions company after the bell Thursday
guided for fourth-quarter revenue of $7.2 billion, plus or minus
$400 million, while the FactSet consensus had been for $9.15
billion.
"Recently, the industry demand environment has weakened, and we
are taking action to moderate our supply growth in fiscal 2023. We
are confident about the long-term secular demand for memory and
storage and are well positioned to deliver strong cross-cycle
financial performance," Chief Executive Sanjay Mehrotra said in the
company's earnings release.
Micron reported third quarter revenue of $8.64 billion, up from
$7.42 billion for the same period last year and in-line with
FactSet consensus. Adjusted per-share earnings were $2.59, ahead of
the FactSet consensus for $2.44.
Raymond James analysts Melissa Fairbanks and Liz Pate maintained
their Strong Buy rating on Micron following the May quarter
results, but lowered their price target to $72 a share.
"Notably, China-specific demand is coming in 30% below prior
expectations, resulting in a 10% cut to overall revenue; the
balance reflects headwinds related to broader macro concerns," the
analysts said.
Chief Business Officer Sumit Sadana said during the company's
earnings call that "the impact of China has been pretty
significant. The weakness in China is very pronounced."
"While the F4Q outlook reflects these near-term headwinds, we
believe the reset was generally expected given increasingly bearish
macro concerns. That said, we are encouraged by the company's
commitment to protect profitability, and while it may take time for
the overall market to respond to lower demand signals, MU's
decision to reduce bit output and cut capex for FY23 sets the
company up to better weather near-term turbulence," Raymond James
said in the research note.
Wedbush analyst Matt Bryson said focus should be squarely on
Micron's sharply reduced guidance for the fourth quarter. "Having
said this, we see Micron's guide as having taken much of the
forward risk out of numbers given management's conservative
bit/pricing guidance," the analyst said.
Write to Michael Dabaie at michael.dabaie@wsj.com
(END) Dow Jones Newswires
July 01, 2022 11:23 ET (15:23 GMT)
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