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Micron Technology Stock Tumbles on Lower Q4 Chip Sales Forecast

Updated 1:34 PM EST

Micron Technology (MU) – Get the report from Micron Technology Inc. Shares fell on Tuesday after the chipmaker lowered its short-term revenue forecast amid what it described as “macroeconomic factors and supply chain constraints” that blunted global demand .

Micron said its new chief financial officer, Mark Murphy, will speak at an industry conference later today and say fiscal fourth-quarter revenue will likely be at the lower end of its early forecast. July, or possibly below, adding that he expects a “tough market.” environment in FQ4 22 and FQ1 23.”

“During the first quarter, Bit shipments are now expected to decline sequentially, and we expect material sequential declines in revenue and margins,” Micron said in a Securities and Exchange Commission filing released Tuesday. We expect free cash flow to be negative in the first quarter.”

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Micron had warned in late June that falling demand will likely mean it will start cutting the amount of chips it produces in the fall, to keep prices firm, and said it expects revenue for its fiscal fourth quarter to just $7.2 billion, well below Refinitiv’s forecast of about $9.1 billion, thanks in part to a 30% decline in overall Micron sales in China.

Micron shares fell 5.1% in early afternoon Tuesday to change hands at $58.32 apiece.

Earlier Tuesday, Micron also unveiled plans to invest about $40 billion over the next eight years in expanding its domestic chip production before President Joe Biden signs into law the CHIPS and Science Act of 52. billion later that day at the White House.

CEO Sanjay Mehrotra said the bill is “an important step toward consolidating American semiconductor leadership for decades to come. I am honored to participate in this historic House Bill Signing Ceremony.” Blanche with them and other leaders”.

At the end of June, Micron posted non-GAAP earnings of $2.59 per share for the three months ending May on revenue of $8.64 billion – both of which beat Street’s forecast – at the end of June. and noted weakness in China and a broader pullback in global chips. demand will reduce earnings growth over the next few months.

DRAM revenue, which accounts for about three-quarters of Micron’s revenue, rose 15% from a year ago to $6.3 billion, while NAND revenue increased 26% to $2.3 billion.