(Reuters) -Micron Technology forecast second-quarter revenue and profit below Wall Street estimates on Wednesday, as weakened prices of memory chips used in handsets and PCs weigh on earnings, sending its shares down 13.6% in extended trading.
Micron’s stock has fallen more than 30% from the record high it hit in June, weighed by disappointing consumer demand.
The market for DRAM chips, which account for most of Boise, Idaho-based Micron’s revenue, remains sluggish because of weak consumer demand and an ongoing supply glut.
DRAM chips are used in data centers, personal computers, smartphones and other computing devices.
Global PC shipments stood at 62.9 million units in the third quarter of calendar year 2024, a 1.3% decline from the previous year, according to research firm Gartner.
“The PC refresh cycle is unfolding more gradually, and we expect PC unit volume growth to be flattish in calendar (year) 2024, slightly below prior expectations,” CEO Sanjay Mehrotra said in the company’s prepared remarks, released ahead of its conference call.
“We remain optimistic about AI PC adoption over time.”
Excluding items, Micron expects to earn $1.43 per share, plus or minus 10 cents, in the second quarter, compared to analysts’ expectation of $1.91, according to data compiled by LSEG.
It expects to report second-quarter revenue of $7.90 billion, plus or minus $200 million, compared to analysts’ estimate of $8.98 billion, according to data compiled by LSEG.
Demand for PCs and smartphones in key markets such as China remains weak, which has led to reduced inventory levels and an oversupply of memory chips.
Micron is working on a 1,400-acre mega campus to make DRAM chips in central New York state.
It also offers flash memory NAND chips, which serve the data storage market.
(Reporting by Rishi Kant in Bengaluru; Editing by Pooja Desai)
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