Micron Technology Inc. shares fell in the extended session Thursday after the memory-chip maker reported another large earnings decline and predicted a disappointing holiday season.
Micron MU, -1.76% shares were down 6.5% in after-hours trading Thursday at the end of an afternoon conference call to discuss the fiscal fourth-quarter results. The company has struggled to bounce back from plunging demand for its memory products over the past year, after rising prices led many customers to build up supply of memory chips.
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“While we are not out of the woods, we are proud of our execution,” Micron Chief Financial Officer David Zinsner said in the conference call.
The company reported fiscal fourth-quarter net income of $561 million, or 49 cents a share, compared with $4.33 billion, or $3.56 a share, in the year-ago period. Adjusted earnings were 56 cents a share.
Revenue fell to $4.87 billion from $8.44 billion in the year-ago quarter. Analysts had forecast earnings of 51 cents on revenue of $4.59 billion on average, according to FactSet.
Micron said it expects adjusted earnings of 39 cents to 53 cents a share on revenue of $4.8 billion to $5.2 billion for the first quarter of its new fiscal year, the holiday quarter. Analysts surveyed by FactSet had forecast earnings of 53 cents a share on revenue of $4.8 billion on average, according to FactSet.
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Even though U.S.-China trade problems may continue to stifle sales to Huawei Technologies Co. over the coming quarters, returning demand in the industry is “solid,” said Sanjay Mehrotra, Micron chief executive, on the call.
“And the second half, as the demand is back, the customer demand is back and yes there may be some level of inventory build in China due to the reasons that I mentioned by certain customers,” Mehrotra said. ”But I’ll tell you that we do not think that that inventory build is anywhere close to the kind of inventory build that had gone on in the second half of last year.”
Micron shares reached their highest level since the dot-com bust of $64.66 on May 30, 2018, at the height of the memory chip boom, and then dropped 56% to $28.39 over the next seven months as inventory problems became more evident.
Micron stock closed Thursday with a 1.8% decline at $48.60. In comparison, the S&P 500 index SPX, -0.24% declined 0.2%, while the Nasdaq Composite Index COMP, -0.58% declined 0.6% and the PHLX Semiconductor Index SOX, +0.03% finished up less than 0.1%.
Of the 33 analysts that cover Micron, 20 have overweight or buy ratings, 10 have hold ratings, and three have sell or underweight ratings, with an average price target of $51.11, according to FactSet data.
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