Shares of Micron Technology Inc., the largest US maker of computer memory chips, plummeted after the company reported that its margins would miss analysts’ estimates this quarter. The company’s gross margins came in at 37.9% on an adjusted basis, falling short of the average 38.4% analyst estimate compiled by Bloomberg.
The disappointing margin results were attributed to pricing for NAND flash memory products, which are expected to improve later in the year. However, Micron’s Executive Vice President Sumit Sadana expressed confidence that as the industry environment improves, particularly in NAND, the company will see a better trajectory.
Micron’s sales forecast for the current quarter is strong, driven by demand for artificial intelligence products. The company predicts revenue of around $8.8 billion and profit of around $1.57 per share, excluding certain items. Sales climbed 38% to $8.05 billion in the second quarter, exceeding analysts’ predictions.
The company’s high-bandwidth memory technology has become a vital piece for AI systems, with revenue crossing $1 billion in the second quarter. CEO Sanjay Mehrotra stated that the company is on track for record revenue and significantly improved profitability in fiscal 2025.
Micron’s stock fell 8.3% at the close of trading on Friday, despite a strong forecast for the current period.
Source: https://finance.yahoo.com/news/micron-gives-upbeat-sales-forecast-202305902.html