Micron Technology’s second quarter earnings posted after the bell on Tuesday included its largest quarterly loss on record, with the company’s earnings hit by $1.34 billion in inventory write-downs.
However, Micron stock rose in after-hours trading on Tuesday and was up about 6% on Wednesday on investors’ belief that the worst may be over for the memory chip maker as the chip industry struggles through a downturn in demand.
For the quarter ended March 2, 2023, the Boise (NYSE:BZ), Idaho-based company posted an adjusted loss per share of $1.91 on revenue of $3.69 billion, compared to earnings per share of $2.14 on revenue of $7.79 billion in the same quarter a year earlier.
Revenue was roughly in line with expectations of $3.71 billion, but Micron’s loss per share was greater than analysts' expectation of $0.67 per FactSet, with the inventory write-down having a negative impact of $1.34 per diluted share.
But what caught the market’s attention was the company’s outlook, with Micron’s CEO Sanjay Mehrotra expressing optimism about the company’s long-term prospects, stating that artificial intelligence provides an additional driver of demand for chips.
“Customer inventories are getting better, and we expect gradual improvements to the industry’s supply-demand balance,” Mehrotra said in a statement.
“We remain confident in long-term demand and are investing prudently to preserve our technology and product portfolio competitiveness.”
For 3Q fiscal 2023, the company forecast an adjusted loss per share of $1.58 on revenue of $3.7 billion, compared to the Street’s projection of a loss per share of $0.96 on revenue of $3.72 billion.
Micron said its guidance assumes inventory write-downs of about $500 million which will negatively impact its earnings by $0.45 per share.
Micron stock had added 6% at $62.80 shortly before noon on Wednesday.
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