Micron Technology (MU) posted narrower-than-expected third quarter loss Thursday, thanks in part to the impact of China's retaliatory ban on some of its chip products, but said it sees a near-term recovery driven by improving market conditions and new AI demand.
Micron said its non-GAAP earnings for the three months ending in May, the group's fiscal third quarter, was at $1.43 per share, down from a profit of $2.59 per share for the same period last year and 15 cents inside the Street consensus forecast.
Group revenues, Micron said, fell 56% to $3.752 billion as the impact of its "security review" by China's Cyberspace Administration, put in place as retribution for the Biden administration's ban on the export of high-tech equipment and chips, hammers both its top and bottom lines.
Looking into the current quarter, Micron said it sees another non-GAAP loss of $1.34 per share, with revenues of around $3.9 billion, both of which were largely in-line with Refinitiv forecasts.
“Micron delivered fiscal third quarter revenue, gross margin, and EPS all above the midpoint of the guidance range,” said CEO Sanjay Mehrotra. “We believe that the memory industry has passed its trough in revenue, and we expect margins to improve as industry supply-demand balance is gradually restored."
"The recent Cyberspace Administration of China decision is a significant headwind that is impacting our outlook and slowing our recovery," he added. "Longer-term, Micron’s technology leadership, product portfolio, and operational excellence continues to strengthen our competitive positioning across diverse growth markets, including AI and memory-centric computing."
Micron shares were marked 3.85% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $69.65 each.
