Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By ProactiveInvestors (Reporter)
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Micron Technology shares slip after CFO says Trump's tariffs will hit business and issues disappointing outlook

% of readers think this story is Fact. Add your two cents.


Shares of the US chipmaker Micron Technology (NASDAQ:MU) took a tumble in Friday’s pre-market trading on news that its profits are likely to take a hit as the US slaps tariffs on Chinese goods.

“Our gross margins will also be impacted in the near term by the announced 10% tariff on US$200bn of imports from China which will go into effect on September 24,” Micron’s CFO David Zinsner said on a conference call to discuss fiscal fourth-quarter earnings, in comments first shared by CNBC. “We are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters.”

The move by Trump to introduce a 10% tariff on US$200bn worth of goods imported from China represents a crushing blow to Micron, which generates a large chunk of its revenue from China.

In Friday’s pre-market session, investors sent Micron shares down nearly 6% to US$43.44 after sending them higher immediately after the release of Micron’s earnings Thursday. 

On the earnings conference call, Zinsner also disappointed investors by projecting that Micron would seet fiscal first-quarter earnings of $2.88 to $3.02 per share on revenue of $7.9 billion to $8.3 billion. Wall Street had projected Micron would earn $3.08 per share on revenue of $8.45 billion.

Micron’s fiscal 4Q results zip past Street’s estimate on revenue and profit

For the fiscal fourth-quarter, however, Micron’s results were strong as the chipmaker beat consensus estimates for both revenue and profit.

In the three months ended August 30, Micron reported earnings of US$4.33bn or US$3.56 per share, on revenue of US$8.44bn. The results trounced the expectations of analysts who had forecast that Micron would earn US$3.34 per share on revenue of US$8.25bn.

The results also compared well with the fourth quarter of last year, when Micron reported earnings of US$1.99 per share or US$2.37bn.

“Micron delivered an exceptional fourth quarter and capped record fiscal year results by becoming the second largest semiconductor company in the US,” said Sanjay Mehrotra, Micron’s president and CEO.

“In the fourth quarter, we set revenue records across all our major markets, from automotive and industrial to mobile and cloud data centers,” Mehrotra added.

Read: Goldman Sachs cools toward Micron, downgrades stock to Neutral from Buy

Revenue for the fourth quarter climbed 8% from the prior quarter when it stood at US$7.97bn and it was also up nearly 38% from the year-ago quarter when it amounted to US$6.14bn. Micron’s gross margin, meanwhile, came in at 61% for the fourth quarter compared to 60.6% in the prior period.

The company spent money in the quarter as its net investments in capital expenditures came to US$2.06bn in its fourth quarter and US$8.2bn for the full year of 2018. Micron also reduced its debt burden to US$4.64bn by either repurchasing or converting US$2.23bn in the principal amount of its debt during the quarter and US$6.96bn for the full year.

Analysts at Goldman Sachs this month cooled towards US chipmaker Micron Technology Inc (NASDAQ:MU), downgrading the stock to Neutral from Buy on weaker fundamentals based on anticipated price cuts on waning demand for DRAM and NAND flash memory chips.

Baird analyst Tristan Gerra also recently slashed his price target on the chipmaker to US$75 from US$100 and reduced his full-year earnings estimate for the shares as gross margin near a peak.

Micron is the fourth-largest US-based chipmaker behind Qualcomm Inc (NASDAQ:QCOM), BroadcomInc (NASDAQ:AVGO) and Intel Corp (NASDAQ:INTC). Unlike its larger peers, however, the Boise, Idaho-based company has doubled down on the market for memory chips.

Micron offers chips that include DRAM, NAND flash and NOR flash. They are used to store information, in comparison to microprocessor chips made by companies like Intel, which provide computing power.

Story by ProactiveInvestors


Source: http://www.proactiveinvestors.com/companies/news/205380/micron-technology-shares-slip-after-cfo-says-trump-s-tariffs-will-hit-business-and-issues-disappointing-outlook-205380.html


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.