(Bloomberg) — Micron Technology Inc., the biggest U.S. maker of computer-memory chips, is poised for its biggest share decline in more than four years, after missing revenue estimates for smartphones and Affected by sluggish demand for personal computers.
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The company said in a statement Wednesday that sales in the fiscal second quarter, which runs through February, will be about $7.9 billion. This compares to the average analyst estimate of $8.99 billion. Profits will not exceed $1.53 a share, minus certain items, well below estimates of $1.92.
Although Micron is seeing strong orders for components used in artificial intelligence computing, it still faces weak demand from phone and PC makers — the two markets that consume most of its chip volume. are
Shares of Micron, up 22% this year through Wednesday’s close, fell 15% in premarket trading before the New York exchange opened on Thursday. If the decline persists, it will be the biggest intra-day decline since March 2020.
“While consumer-oriented markets remain weak in the near term, we expect a return to growth in the second half of our fiscal year,” Chief Executive Officer Sanjay Mehrotra said in the statement.
In the fiscal first quarter ended Nov. 28, sales rose 84% to $8.71 billion. Excluding certain items, the profit was $1.79 per share. Analysts had forecast sales of $8.71 billion and a profit of $1.76 on average.
Data center-related revenue grew 400% in the year-ago quarter, the company said. This unit now accounts for more than half of the company’s total sales. Still, the growth wasn’t enough to offset weak orders from makers of devices aimed at consumers, Micron said.
In that area, customers are working through a backlog of inventory.
“We are now seeing a more pronounced impact of customer inventory reductions,” Micron said in an investor presentation. “We expect this adjustment period to be relatively brief and customer inventories are expected to return to healthy levels by spring.”
The company predicts that the PC market will grow by about 5% in 2025, with most of the expansion coming in the second half. It commented that owners of the devices are updating them more slowly than expected.
Micron said its mobile business unit suffered a 19% sequential decline, driven by inventory reductions. Automotive and industrial sales also fell.
For fiscal 2025, the chipmaker is budgeting to spend $14 billion on new plants and equipment. That amount includes a reduction in its planned spending on new production for storage chips.
