Shares of Micron Technology (MU -2.95%) were sliding this morning after the company reported its third-quarter results. The company beat analysts’ consensus earnings and revenue estimates for the quarter, but the company’s guidance for the upcoming quarter disappointed investors.
As a result, the tech stock was down by 5% at 12:20 p.m. ET.
Micron reported non-GAAP (adjusted) earnings of $2.59 in the quarter, which beat Wall Street’s consensus estimate of $2.44 per share. Additionally, the tech company’s sales of $8.64 billion were up 16% from a year ago and just inched past analysts’ average estimate of $8.63 billion.
But instead of looking at the company’s top- and bottom-line beats, investors instead latched on to the company’s guidance for the fourth quarter.
Micron’s management said that non-GAAP earnings will be in the range of $1.43 to $1.83 per share, which is lower than Wall Street’s average estimate of $2.62 per share.
Fourth-quarter revenue guidance also fell below expectations, with management saying total sales will be $7.2 billion, at the midpoint of guidance, which is far below the $9 billion analysts were expecting.
Investors weren’t comforted by management’s comments in the quarterly press release, either. CEO Sanjay Mehrotra said, “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023.”
While he added that the company is confident about long-term demand, his comments paired with the company issuing disappointing guidance for the fourth quarter spooked Micron investors today.