On Wednesday Eastern Time, Micron Technology announced its first fiscal quarter (ending November 28) financial results. The financial report shows that although Micron's first fiscal quarter performance was generally in line with expectations, due to weak consumer electronics demand and softening memory chip prices, Micron Technology's revenue and profit outlook for the second fiscal quarter were lower than Wall Street expectations. This caused the company's stock price to plummet in after-hours trading, and it had fallen by nearly 16% as of press time.
Affected by weak market demand, Micron's stock price has fallen by more than 30% from its record high in June.
Micron gives disappointing answer
With Broadcom's recent strong financial report and outlook, U.S. chip stocks have experienced significant fluctuations. Therefore, Micron's financial report has also attracted market attention.
However, unlike Broadcom, Micron's financial report did not satisfy the market. The global market for DRAM chips, which account for the majority of Micron's revenue, remains sluggish due to weak consumer demand and an ongoing supply glut.
The financial report shows that in the first fiscal quarter ended November 28,
Micron’s revenue was US$8.71 billion, while analysts expected US$8.7 billion;
Adjusted EPS was $1.79, compared with analysts' expectations of $1.76.
Looking ahead to the second fiscal quarter, based on data compiled by LSEG, excluding certain items,
Micron expects second-quarter earnings of $1.43 per share, plus or minus $0.10, while analysts expected $1.91.
Micron expects second-quarter revenue of $7.9 billion, plus or minus $200 million, compared with analysts' estimates of $8.98 billion.
Consumer electronics market demand remains weak
Currently, demand for PCs and smartphones remains weak in major global markets, leading to falling inventory levels and an oversupply of memory chips.
According to data from research firm Gartner, global personal computer shipments in the third quarter of 2024 were 62.9 million units, a decrease of 1.3% from the same period last year.
Micron CEO Sanjay Mehrotra said in a company statement released before the conference call: "The PC refresh cycle is gradually unfolding, and we expect PC sales growth to be flat in 2024 and slightly lower than previous expectations... As time goes by, we remain optimistic about the popularity of artificial intelligence PCs."
He also said: "While the consumer-facing market is weak in the short term, we expect to return to growth in the second half of this fiscal year."