fell in late trading Tuesday after the company beat expectations for its quarterly results but failed to impress Wall Street with its outlook.
The Memory Maker reported fiscal fourth quarter net income of $2.72 billion, representing $2.39 per share, compared to net income of $988 million, or 87 cents per share, in the same period a year ago. Adjusted for, among other things, share-based compensation, earnings were $2.42 per share. Revenue rose 37% to $8.27 billion.
The consensus estimate for adjusted earnings was $2.33 per share on revenue of $8.2 billion.
Micron (ticker: MU) said it expected first-quarter earnings of about $2 a share on revenue of about $7.65 billion. Analysts expected earnings of $2.53 and revenue of $8.54 billion.
Shares fell 4.1% in after-hours trading.
Micron CEO Sanjay Mehrotra said in prepared remarks that memory demand is strong in 2022 and will grow in the “mid to high teens.” Flash storage, which Micron also makes, will grow by about 30%, he said. The company expects a “healthy supply-demand balance in the sector” and strong profitability next year.
“Industry trends such as the broad integration of artificial intelligence into all computing, the proliferation of the intelligent edge, continued data center growth and 5G network deployments are creating new and growing opportunities for Micron,” said Mehrotra.
But strong demand was not enough to appease investors.
Semiconductors of all kinds were in short supply, leading investors to expect excessive returns for the companies in the company. Since chip companies should basically be able to sell everything they can produce, investors have expected companies to report healthy profits followed by guidance that also exceeds expectations.
Some research analysts had begun to scale back expectations ahead of Tuesday’s quarterly report. if Barron’s Citi Research analyst Christopher Danely said on Monday that he remains optimistic about the company but expects memory prices to fall in the coming months. Cheaper memory could impact Micron’s profit margins, although Danely expects prices to recover in the second half of next year.
Micron said it plans $11 billion to $12 billion in capital expenditures for fiscal year 2022. The company also said it plans to pay its first dividend payment of 10 cents per share to shareholders next month with a record as of Oct. 1.
Micron stocks are down 2.8% this year. The
PHLX Semiconductor Index,
or SOX, is up 19% over the year, while the
index rises by 16%.