Micron Technology Inc. shares were flat in the extended session Thursday after the memory-chip maker said it was taking steps to emerge from a current downcycle in market by scaling back on plans to build out capacity.
shares were flat after hours Thursday, following a 1.9% decline to close the regular session at $50.01. Micron shares are down 46% for the year compared with a 24% fall by the S&P 500 index
and a 31% drop by the Nasdaq Composite Index
For the fiscal first quarter, the Boise, Idaho-based chip maker said it expects between an adjusted loss of 6 cents and net income of 14 cents a share on revenue of $4 billion to $4.5 billion. Analysts had forecast 69 cents a share on revenue of $5.71 billion.
Read: Microsoft, Google parent Alphabet, and nearly a fifth of S&P 500 hits 52-week lows
That huge miss was likely expected given the company last quarter was the first major chip maker this year to fess up that there may be pockets of oversupply in the chip market following two years of COVID-19 pandemic-driven shortages.
“We made significant reductions to capex and now expect fiscal 2023 capex to be around $8 billion, down more than 30% year over year,” said Sanjay Mehrotra, Micron’s chief executive, in prepared remarks. “Capex would be lower if it were not for more than doubling our construction capex year over year to support the supply growth required to meet demand for the second half of this decade.”
Mehrotra said that the company will also cut back on capex in wafer fab equipment by nearly 50% for the coming year.
For the fiscal fourth quarter, Micron reported net income of $1.49 billion, or $1.35 a share, compared with $2.72 billion, or $2.39 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.45 a share, compared with $2.42 a share in the year-ago period.
Revenue fell to $6.64 billion from $8.27 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $1.37 a share on revenue of $6.73 billion, based on Micron’s forecast of $1.43 to $1.83 a share on revenue of $6.8 billion to $7.6 billion.
Read: Intel CEO takes on Nvidia with new launch
Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in smaller devices like smartphones and USB drives.
Over the past 12 months, Micron shares have declined 30%, while the PHLX Semiconductor Index
has dropped 28%, the S&P 500 has declined 16%, and the tech-heavy Nasdaq has fallen 26%.