Micron Q4 Earnings: Beats Estimates, but Poor Guidance Drags Stock Price
Micron's stock fell in the premarket after the chipmaker issued mixed guidance for the fiscal Q1 2024.
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Chip manufacturer Micron reported Q4 2023 earnings and revenue, beating analysts’ expectations on Wednesday. But the company’s shares plunged 4.6% in Thursday premarket trading as the firm delivered less optimistic guidance.
Micron Issues Mixed Outlook Amid Supply Constraints
Micron posted quarterly earnings results for the fiscal Q4 2023, exceeding Wall Street estimates on Wednesday. However, the company issued mixed guidance for the first quarter due to persisting supply constraints, sending the chipmaker’s shares tumbling by 4.6% in the premarket.
Notably, Micron reported an adjusted loss of $1.07 per share for the fourth quarter, narrower than the expected loss of $1.15 per share. Revenue came in at $4.01 billion, above the consensus estimates of $3.93 billion but significantly down from the $6.65 billion reported in the same period last year.
Gross margins fell to -10.8% from 39.5% in the year-ago quarter due to a nearly 40% decline in revenue as waning demand continues to weigh on chip manufacturers.
Looking ahead, Micron expects a quarterly loss in the range of $1 to $1.14 per share, compared to the projected loss per share of $0.92. Further, the company estimates Q1 revenue in the range of $4.2 to $4.6 billion, while analysts guided for $4.22 billion.
“Our 2023 performance positions us well as a market recovery takes shape in 2024, driven by increasing demand and disciplined supply. We look forward to record industry TAM revenue in 2025 as AI proliferates from the data center to the edge.”
– Micron CEO Sanjay Mehrotra said during the conference call.
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Micron Working to Supply Nvidia With High-Bandwidth Chips
During the earnings conference call, Micron also told the analysts it is preparing to raise production of new product lines and is working to become a supplier to industry giant Nvidia, which soared to new heights in 2023.
In particular, Micron said it is collaborating with Nvidia to qualify its latest high-bandwidth memory chips for use in Nvidia’s computing semiconductors. The growing demand for high-bandwidth memory chips amid the ongoing artificial intelligence (AI) boom has raised hopes among investors that the company will offset a slow recovery in other end markets.
Mehrotra expects Micron to rake in “several hundred million” dollars in revenue from its new high-bandwidth chips in 2024. In addition, the chipmaker also believes its gross margins will turn positive again in the second half of the next year.
Do you think Micron’s collaboration with Nvidia will help the company reach profitability? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
