IDAHO: Micron Technology Inc. provided guidance for its current quarter that fell well below expectations and reported a 27% drop in first-quarter revenue, as weakening demand for personal computers continues to weigh on the selling price of its chips.
Shares of the company fell 3.3% in after-hours trading.
One of the world’s largest memory chip makers, Micron is the last remaining U.S. supplier of a widely used variety called dynamic random access memory, or DRAM, a key component in personal computers.
In the latest quarter, selling prices for DRAM were off 13% from the previous consecutive quarter.
“While conditions in some market segments are challenging, we believe long-term industry fundamentals are healthy,” said Chief Executive Mark Durcan in a news release.
Micron, also a maker of NAND flash memory used in smartphones, has benefited from industry consolidation and an increasing array of devices that use memory chips. Earlier this month, Micron said it would buy the 67% stake in Taiwan’s Inotera Memories Inc. it doesn’t already own for $4.1 billion, solidifying control over a major source of memory chips.
For the period ended Dec. 3, Micron reported a profit of $206 million, or 19 cents a share, down from $1 billion, or 84 cents a share, a year earlier.
Excluding special items, profit was 24 cents.
Revenue fell to $3.35 billion from $4.57 billion a year earlier.
Analysts polled by Thomson Reuters had forecast 23 cents a share in earnings on $3.46 billion in revenue.
Gross margin narrowed to 25.3% from 35.8% a year earlier, as the drop in revenue outpaced the decline in input costs.
For the current quarter, Micron forecast an adjusted per-share loss of 5 cents to 12 cents on revenue of $2.9 billion to $3.2 billion. Analysts polled by Thomson Reuters had recently forecast 22 cents a share in earnings on $3.46 billion in revenue.
