Micron forecasts fourth-quarter profit below estimates

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Micron Technology projected fourth-quarter revenue and profit below market estimates on Thursday, a sign that geopolitical turmoil and weakness in consumer spending would weigh on demand for its memory chips.

Shares of the Boise, Idaho-based company fell 6.3 per cent in extended trading.

The outlook for memory chipmakers has worsened in recent months as surging inflation, China's cooling economy and the Russia-Ukraine war hit consumer spending on smartphones and personal computers, a crucial market for the industry.

That has driven down chip prices and led to a build-up of inventories, with research firm TrendForce estimating a 3 per cent to 8 per cent drop in prices of DRAM chips during the third quarter of 2022.

DRAM chips - widely used in data centers, personal computers, and other devices - account for two-thirds of Micron's revenue, and the company also makes NAND memory chips that serve the data storage market.

Micron forecast adjusted revenue for the current quarter to be $7.2 billion, plus or minus $400 million. Analysts on average expected a figure of $9.05 billion, according to Refinitiv IBES data.

The company expects adjusted profit for the quarter to be $1.63 per share, plus or minus 20 cents, compared with estimates of $2.57 per share.

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