Published - December 23, 2022 @ 3:46 PM (EET)

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This week, Micron Technology Inc., (NASDAQ:MU) the largest memory chipmaker in the US, reported fiscal first-quarter results that reached the low end of its guidance for both revenue and profits.

In addition, the company announced a host of cost-cutting measures, including a 10% work reduction. It said the worst industry glut in over ten years will make it difficult for the company to return to profitability in 2023.

After its results were released, executives said on a conference call the company, in addition to its planned workforce reductions, had suspended share repurchases, cut executive salaries, and will skip companywide bonus payments.

The downbeat comments from the memory chip giant sent shares down about 3.4% in extended trading Wednesday, dragging down shares of other PC and mobile-related chip makers. 

Advanced Micro Devices was off 7% (NASDAQ:AMD), Nvidia (NASDAQ:NVDA) fell 6.8%, and Intel (NASDAQ:INTC) traded 3.5% lower as semiconductor makers deal with plummeting demand for their products less than a year after being unable to produce enough to meet orders.

EARNINGS RESULTS

The firm, on Wednesday, posted a higher-than-expected adjusted loss per share of $0.04, while revenue declined 47% to $4.09 billion, missing the consensus estimate of $4.15 billion.

According to a recent SEC filing, Micron expects a $30 million charge in the current quarter related to restructuring, which will also include less investment.

Micron further unveiled it would cut its fiscal 2023 capital expenditure budget to between $7 billion and $7.5 billion. The estimates are down from a previous forecast of $8 billion and well below the $12 billion spent in fiscal 2022.

In the fiscal second quarter, Micron said sales would be about $3.8 billion compared with analysts average estimate of $3.88 billion.

Analyst reaction to the quarter was mixed, with the debate on Wall Street being whether the stock has now set a stable bottom. Following the results, Micron's stock set a new two-year low, boosting its 2023 decline to 47%.

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