Micron's weaker-than-expected guidance due to its PC customers having their own part shortages, CEO says
- Micron Technology's current-quarter revenue projections came in below Wall Street estimates.
- However, CEO Sanjay Mehrotra told CNBC's Jim Cramer on Wednesday the memory chip maker felt confident about its business overall.
- That's because the lower-than-expected sales guidance is a result of external factors that its computer-making customers are facing.
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Micron Technology CEO Sanjay Mehrotra told CNBC on Wednesday the memory chip maker felt confident about its business overall, despite its current-quarter revenue projections coming in below Wall Street estimates.
In an interview with Jim Cramer on "Mad Money," Mehrotra said the lower-than-expected sales guidance is a result of external factors that its computer-making customers are facing.
"PC end user demand is strong, but some of the PC customers are not able to fulfil their demand because their not getting sufficient all components that are needed to build the PCs," Mehrotra told Cramer. "As a result, some of the demand to us is impacted from them as they balance some of their inventory considerations."
After the close Tuesday, Micron reported fiscal fourth-quarter revenue and earnings per share that topped Wall Street estimates. But the company's fiscal first-quarter revenue forecast of $7.65 billion, plus or minus $200 million, was lower than $8.57 billion analysts projected on average, according to Refinitiv.
Shares of Micron slid as investors digested the news, initially falling almost 4% in after-hours trading. The stock's declines went on to moderate, closing down 2 % during regular trading Wednesday.
"This we look at it as an air pocket in the PC segment," said Mehrotra, who's served as CEO of Micron for four years. "Outside of that, across other markets, the demand drivers are strong." He added, "We are also projecting that our fiscal year 2022, which has just started, will be a record year for the company with solid profitability."
In addition to PCs, Micron makes memory chips that also are used in data centers, smartphones and vehicles.
Micron's situation with its PC customers further illustrates the wide-ranging effects of supply-chain bottlenecks and parts shortages that have cropped up during the Covid pandemic. On Tuesday, for example, speaker maker Sonos CEO Patrick Spence told Cramer: "In my 23 years in tech, I haven't seen a period as challenged as this."
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