Micron Technology Inc (NASDAQ:MU), the largest US maker of computer memory chips, stock fell 6.98% (As on June 27, 11:46:02 AM UTC-4, Source: Google Finance) after the company beat estimates for third-quarter revenue driven by strong demand for its memory chips, but its current-quarter forecast disappointed investors who were upbeat about the chipmaker’s performance in the AI boom. The company said its HBM chips were “sold out” for the 2024 and 2025 calendar years.
Further, Micron sold $100 million of new HBM3e chips in the just-completed quarter and predicts that total sales of high-bandwidth products will rise to “several hundred million dollars” in the current period. It will then increase to multiple billions in fiscal 2025, which runs through August of that year. Ramping up production of this new memory has been a challenge. Due to the difficulty of increasing factory output — and qualifying the chips to work with computer systems — supply effectively has a “hand brake on it”. The company is on course to spend about $8 billion on new plants and equipment in fiscal 2024. That budget will increase materially next year in support of construction at sites in Idaho and in New York state.
MU in the first quarter of FY 24 has reported the adjusted earnings per share of 62 cents, beating the analysts’ estimates for the adjusted earnings per share of 50 cents. The company had reported the adjusted revenue growth of 82 percent to $6.81 billion in the first quarter of FY 24, beating the analysts’ estimates for revenue of $6.67 billion.
Additionally, Investments in capital expenditures, net were $2.06 billion for the third quarter of 2024, which resulted in adjusted free cash flows(2) of $425 million. Micron ended the third quarter of 2024 with cash, marketable investments, and restricted cash of $9.22 billion. The company has declared a quarterly dividend of $0.115 per share, payable in cash on July 23, 2024, to shareholders of record as of the close of business on July 8, 2024.
The company forecast revenue of $7.6 billion, plus or minus $200 million, for the current quarter, compared with an estimate of $7.6 billion, according to LSEG data. Profit will be about $1.08 a share, minus certain items, versus a projection of $1.02.
The company said that PC-industry unit sales remain on track to increase by a percentage in the low single digits in calendar 2024. Smartphone units will gain by a low- to mid-single-digit range. The company expects AI features to help spur demand for phones and PCs heading into 2025.