Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their fair booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach/File Photo
(Reuters) – U.S. chipmaker Micron Technology Inc (MU.O) on Tuesday missed Wall Street estimates for quarterly revenue, hurt by falling prices for its memory chips due to a supply glut just as both business and consumer demand has become wobbly.
Shares of the Boise, Idaho-based company fell 1 percent after the bell.
The industry is battling price declines due to oversupply of DRAM and NAND memory chips, with Micron trying to overcome that by investing more in its next generation of chips. Major suppliers to smartphone makers such as Apple Inc (AAPL.O) have lowered their sales forecasts, citing weak demand from device makers.
On a post-earnings call, Chief Executive Officer Sanjay Mehrotra cited “inventory adjustments” at data center clients for the tougher revenue environment.
Several chipmakers have said they experienced strong demand in the months before the United States implemented tariffs on some Chinese goods, leaving analysts wondering if data center owners had tried to get in orders ahead of the levies.
“We expect this headwind will persist for a couple of quarters. We are seeing some cloud customers go through a digestion period following very strong growth over the last two years,” Mehrotra said on the call.
Net sales rose 16 percent to $7.91 billion, but missed analyst expectations of $8.02 billion.
Net income attributable to the chipmaker rose to $3.29 billion, or $2.81 per share, in the quarter ended Nov. 29, from $2.68 billion, or $2.19 per share, a year earlier.
Excluding items, Micron earned $2.97 per share, narrowly beating the analyst average estimate of $2.96, according to IBES data from Refinitiv.
Reporting by Sonam Rai in Bengaluru and Stephen Nellis in San Francisco; Editing by Arun Koyyur and Rosalba O’Brien