© Reuters. Micron GDDR6X graphics memory solution is pictured in this April 12, 2022 handout image. Micron Technology/Handout via REUTERS
(Reuters) – Micron Technology (NASDAQ:) projected fourth-quarter revenue and profit below market estimates on Thursday, a sign that geopolitical turmoil and weakness in consumer spending would weigh on demand for its memory chips.
Shares of the Boise, Idaho-based company fell 6.3% in extended trading.
The outlook for memory chipmakers has worsened in recent months as surging inflation, China’s cooling economy and the Russia-Ukraine war hit consumer spending on smartphones and personal computers, a crucial market for the industry.
That has driven down chip prices and led to a build-up of inventories, with research firm TrendForce estimating a 3% to 8% drop in prices of DRAM chips during the third quarter of 2022.
DRAM chips – widely used in data centers, personal computers, and other devices – account for two-thirds of Micron’s revenue, and the company also makes NAND memory chips that serve the data storage market.
Micron forecast adjusted revenue for the current quarter to be $7.2 billion, plus or minus $400 million. Analysts on average expected a figure of $9.05 billion, according to Refinitiv IBES data.
The company expects adjusted profit for the quarter to be $1.63 per share, plus or minus 20 cents, compared with estimates of $2.57 per share.