Micron forecasts fourth-quarter profit below estimates

Micron GDDR6X graphics memory solution is pictured in this flyer image on April 12, 2022. Micron Technology / Handout via Reuters

June 30 (Reuters) – Micron Technology Inc. (MU.O) expected fourth-quarter revenue and profit to fall short of market estimates on Thursday, a sign that geopolitical turmoil and weak consumer spending will weigh on demand for its memory chips.

Shares of Boise, Idaho Inc. fell 6.3 percent in extended trading.

The outlook for memory chip makers has worsened in recent months as rising inflation and a cooling economy in China and the Russia-Ukrainian war hurt consumer spending on smartphones and personal computers, an important market for the industry.

This drove down chip prices and led to a buildup of inventories, with research firm TrendForce estimating a 3% to 8% drop in DRAM chip prices during the third quarter of 2022.

DRAM chips — widely used in data centers, personal computers, and other devices — account for two-thirds of Micron’s revenue, and the company also makes NAND memory chips that serve the data storage market.

Micron forecast adjusted revenue for the current quarter of $7.2 billion, plus or minus $400 million. Analysts, on average, expected a figure of $9.05 billion, according to Refinitiv IBES data.

The company expects adjusted earnings for the quarter to be $1.63 per share, plus or minus 20 cents, compared to estimates of $2.57 per share.

Additional reporting by Shafi Mehta in Bengaluru and Jane Lanhe Lee in Oakland, California; Edited by Aditya Sony

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