Micron Technology Inc. shares declined in the extended session Thursday after the memory-chip maker said it was taking steps to emerge from a current downcycle in market by scaling back on plans to build out capacity.
Micron
MU,
shares were down 1% after hours Thursday, following a 1.9% decline to close the regular session at $50.01. Micron shares are down 46% for the year compared with a 24% fall by the S&P 500 index
SPX,
and a 31% drop by the Nadsaq Composite Index
COMP,
For the fiscal first quarter, the Boise, Idaho-based chip maker said it expects between an adjusted loss of 6 cents and net income of 14 cents a share on revenue of $4 billion to $4.5 billion. Analysts had forecast 69 cents a share on revenue of $5.71 billion.
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That huge miss was likely expected given the company last quarter was the first major chip maker this year to fess up that there may be pockets of oversupply in the chip market following two years of COVID-19 pandemic-driven shortages.
“We are taking decisive steps to reduce our supply growth, including a nearly 50% wafer-fab equipment capex cut versus last year, and we expect to emerge from this downcycle well-positioned to capitalize on the long-term demand for memory and storage,” said Sanjay Mehrotra, Micron’s chief executive, in a statement.
For the fiscal fourth quarter, Micron reported net income of $1.49 billion, or $1.35 a share, compared with $2.72 billion, or $2.39 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.45 a share, compared with $2.42 a share in the year-ago period.
Revenue fell to $6.64 billion from $8.27 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $1.37 a share on revenue of $6.73 billion, based on Micron’s forecast of $1.43 to $1.83 a share on revenue of $6.8 billion to $7.6 billion.
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Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in smaller devices like smartphones and USB drives.
Over the past 12 months, Micron shares have declined 30%, while the PHLX Semiconductor Index
SOX,
has dropped 28%, the S&P 500 has declined 16%, and the tech-heavy Nasdaq has fallen 26%.
