Memory chip parts of the U.S. memory chip maker MicronTechnology are shown at their fair stand at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach/File Photo
(Reuters) – U.S. chipmaker Micron Technology, Inc. (MU.O) on Tuesday missed Wall Street estimates for quarterly revenue, hurt by falling prices for memory chips by a supply glut, both the business and the consumer demand has become wobbly.
Shares of the Boise, Idaho-based company fell 1 percent after the bell.
The industry is fighting price declines due to oversupply of DRAM and NAND memory chips, with Micron trying to overcome that by more to invest in the next generation of chips. Main suppliers for smartphone manufacturers like Apple Inc (AAPL.O) have lowered their revenue forecasts, citing weak demand from device makers.
On a post-transcription, Chief Executive Officer Sanjay Mehrotra cited “inventory adjustments” in the data center clients for the tougher sales environment.
Several chipmakers have said that they experienced a strong demand in the months before the United States implemented tariffs on some Chinese goods, which analysts are wondering whether data-center owners had tried to get the orders in ahead of all the charges.
“We expect that these headwinds will continue for a few quarters. We see a number of cloud customers to go through a digestion period after a very strong growth in the last two years,” Mehrotra said on the call.
Net sales increased 16 percent to $7.91 billion, but missed analyst expectations of $8.02 billion.
Net income attributable to the chipmaker rose to $3.29 billion, or $2.81 per share in the quarter that ended Nov. 29, of € 2.68 billion, or $2.19 per share, a year earlier.
Excluding items, Micron earned $2.97 per share, narrowly beating the analyst average estimate of $2.96, according to the IBES data of Refinitiv.
Reporting by Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Editing by Arun Koyyur and Rosalba O’brien