Memory manufacturer Micron Technology’s (NASDAQ: MU) Q1 FY25 figures came in below Wall Street estimates overnight, with expected earnings for Q2 of just US$1.43 a share (+/- 10c), a significant drop compared to analyst forecasts of US$1.91.
Q2 revenue guidance missed the mark, with a forecast net income of US$7.9 billion markedly lower than analyst predictions of US$8.98 billion.
The announcement sent shares tumbling 4.33% to close at US$103.90 on the NASDAQ.
The US$115 billion market-cap chip producer cited weaker near-term consumer markets for the lower than expected earnings per share (EPS) figure.
Its non-GAAP net income was US$2.04 billion, or US$1.79 per diluted share, while operating cashflow hit US$3.24 billion, down from US$3.41 billion quarter-on-quarter.
While the chip market is expected to bounce and have exponential growth in the coming years, demand for PCs and smartphones in key markets like China are at weakened levels at the moment.
Yet Micron did deliver a record quarterly revenue of US$8.71 billion, which came in line with its most recent guidance.
Micron President and CEO Sanjay Mehrotra said not only did it deliver a record quarter, its data centres surpassed 50% of total revenue for the first time.
“While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year,” Mehrotra said.
“We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders.”
Micron makes two main types of computer memory: DRAM and Nand and has a strong long term outlook.
It recently received a US$6.1 billion subsidy from the US government to support its goals of investing US$125 billion into domestic chip manufacturing.