Micron Technology 09.30 NASDAQ: MU the shares took a hit late Tuesday afternoon, following the company’s release in the fourth quarter of fiscal 2020 results after market hours.
For the quarter, the PC and mobile memory maker actually published a promising foundation. Revenue for the period reached $ 6.06 billion, which is stable at 24% higher than the same period in 2019. GAAP net income (adjusted) nearly doubled to just under $ 1.23 billion dollars) from the result of 637 million dollars a year ago.
Both results conveniently top the analysts’ estimates. Collectively forecast stocks modeled $ 5.89 billion at the top and adjusted net earnings per share of $ 0.98.
However, Micron’s guidelines did not live up to expectations. The company forecasts that for the first quarter of 2021 it will report revenues of 5.0 to 5.4 billion dollars and adjusted net profit of 0.40 to 0.54 dollars per share. While the first range covers analysts’ average forecast of $ 5.27 billion, the second does not come close to the expected $ 0.66 per share.
The most uncomfortable factor for this is the loss of a large and important customer, Chinese technology hardware giant Huawei. The US government banned US companies from selling chips to Huawei, and Micron’s business with the Chinese technology giant ended abruptly shortly after the end of the fourth quarter. During the quarter, Huawei’s business accounted for about 10% of Micron’s total revenue, so the loss will affect results.
Investors are adjusting to this less sunny near future for the company. In aftermarket trading on Tuesday, they lowered the share price of Micron by 3.5%.