Micron Technology shares dropped more than 6 percent during after hours trading Tuesday after the company missed revenue expectations in its quarterly earnings.
The company reported $7.91 billion, missing revenue estimates of $8.02 billion. However, it exceeded expectations in earnings, reporting $2.97 per share, beating analysts’ expectations of $2.96 per share.
On a conference call, Micron’s CEO Sanjay Sehorta said the revenue headwinds were due to “inventory adjustments.” The company also announced plans to reduce capital expenditures in fiscal 2019.
Micron said the impact of US tariffs were a half percent of its gross margin in the fiscal first quarter.
The Boise, Idaho-based company announced in September that President Trump’s tariffs on Chinese goods will hurt its profitability.
“Our gross margins will also be impacted in the near term by the announced 10 percent tariff on $200 billion of imports from China which will go into effect on September 24,” CFO David Zinsner said. “We are working to gradually mitigate most of the impact from these tariffs over the next three to four quarters.”
Both Deutsche Bank and BMO Capital Markets cut their price target for Micron by 25 percent in September.
