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Micron gives bleak profit outlook on trade, economic uncertainty

Credit: REUTERS/Kai Pfaffenbach

Micron Technology Inc forecast first-quarter profit below Wall Street targets, saying it was "mindful" of economic and trade uncertainty even though there were signs of a pickup in memory chip demand, sending shares down 6%.

Adds forecast, CEO quote, share movement

Sept 26 (Reuters) - Micron Technology Inc MU.O forecast first-quarter profit below Wall Street targets, saying it was "mindful" of economic and trade uncertainty even though there were signs of a pickup in memory chip demand, sending shares down 6%.

The prolonged U.S.-China trade war has impacted chipmakers already reeling under a saturated smartphone market, especially after the Trump administration blocked access to Huawei [RIC:RIC:HWT.UL] , the world's largest telecommunications equipment maker and Micron's single largest customer.

Research firm Gartner expects a 9.6% drop in global semiconductor revenue to $429 billion in 2019.

Micron resumed some chip shipments to Huawei in June after finding some of its products did not fall under the blacklist.

The company said it expects adjusted profit in the range of 35 cents to 49 cents per share in the first quarter, below average estimates of 48 cents.

Net income attributable to the company fell to $561 million, or 49 cents per share, in the quarter ended Aug. 29, from $4.33 billion, or $3.56 per share, a year earlier.

Revenue fell to $4.87 billion from $8.44 billion, but beat analysts' estimates of $4.57 billion, according to IBES data from Refinitiv.

Excluding items, the company earned 56 cents per share, above analysts' expectations of 49 cents.

Shares of the company, which have gained 53% this year, fell to $46 in extended trading.

(Reporting by Neha Malara in Bengaluru; Editing by Arun Koyyur)

((Neha.Malara@thomsonreuters.com; within U.S.+1 646 223 8780; outside U.S. +91 80 6749 0344;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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