Micron Technology, Inc. (NASDAQ: MU) reported its third quarter financial results after the closing bell on Thursday. Despite topping estimates, Micron shares edged lower by 6% shortly after reporting.
For the quarter, Micron reported earnings of USD 0.56 per share on revenue of USD 4.87 Billion. FactSet analysts expected earnings of USD 0.51 per share on revenue of USD 4.59 Billion.
Micron witnessed its revenue substantially decline compared to its revenue of USD 7.79 Billion in the third quarter of last year. The Company wasn’t able to bounce back from the declining demand for its memory products over the past year.
Specifically, memory chip prices continued to rise, which led to an excess overflow in inventory and led many customers to build up a supply of memory chips.
A large portion of Micron’s deficit can be attributable to Huawei’s blacklisting. Earlier in the year, U.S. President Donald Trump put Huawei on a blacklist, which prohibited American companies from dealing in business with the Chinese tech giant.
Consequently, one of Micron’s partners was Huawei. Despite the regulatory issues, Micron Chief Executive Sanjay Mehrotra said on the earnings call that the returning demand in the industry is “solid.”
“And the second half, as the demand is back, the customer demand is back and yes there may be some level of inventory build in China due to the reasons that I mentioned by certain customers,” Mehrotra said. ”But I’ll tell you that we do not think that that inventory build is anywhere close to the kind of inventory build that had gone on in the second half of last year.”
For the next quarter, Micron said it expected adjusted earnings between USD 0.39 to USD 0.53 per share on revenue in the range between USD 4.8 Billion to USD 5.2 Billion. FactSet analysts are estimating earnings of USD 0.53 per share on revenue of USD 4.8 Billion.
Despite the decline on Thursday, Micron shares are still up 38.1% heading into Friday morning.