Micron Stock Plunges As Weak PC Market Weighs On Results

(RTTNews) - Chip maker Micron Technology Inc (MU), on Thursday reported a plunge in third-quarter profit, hurt largely by weak demand and pricing pressures due to softness in the personal computer sector, as well as one-time expenses. Both earnings and revenue for the quarter came in short of Wall Street estimates.

The company provided some weak revenue outlook for the fourth quarter, indicating the challenges it continues to face.

"Micron experienced market headwinds driven primarily by weakness in the PC sector," said Micron CEO Mark Durcan in a statement.

Following the announcement, Micron shares fell the most in a year, losing 8.62 percent to trade at $21.95 in after-hours on the Nasdaq.

Micron, based in Boise, Idaho, reported third-quarter net earnings of $491 million or $0.42 per share, compared with $806 million or $0.68 per share last year.

Results for the quarter include one-time expenses of $129 million, partly related to debt losses and amortization charges.

Excluding items, adjusted earnings for the quarter were $0.54 per share.

On average, 27 analysts polled by Thomson Reuters estimated earnings of $0.56 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter were $3.85 billion, compared with $3.98 billion in the prior year.

Thirty analysts had a consensus revenue estimate of $3.90 billion for the quarter.

Research expenses were higher by $57 million.

For the fourth quarter, Micron expects revenues of $3.45 billion to $3.7 billion, while analysts expect $4.16 billion.

Micron is known for its memory chips such as DRAM, NAND and NOR Flash that are used in computers. It also makes memory chips for smartphones, as well as solid-state drives. While historically Micron has been DRAM-oriented, pricing pressures has made it to expand its product portfolio.

Micron stock closed Wednesday's trade at $24.02, down $0.04 or 0.17%, on a volume of more than 30 million shares. In after hours, the stock dropped $2.07 or 8.62% at $21.95. In the past year, the stock has traded in the range of $23.66 - $36.59.