Micron Technology, Inc. (NASDAQ:MU) shares were down 9.16% on Friday to $12.50 and could see more declines even after the company printed stronger than expected EPS.
Earnings per share stood at -$0.08 versus the consensus estimate of -$0.09. Revenue for the quarter came in at $2.9 billion versus the consensus estimate of $2.96 billion.
Micron Technology is engaged in semiconductor systems, with its portfolio of memory technologies serving as the basis for solid-state drives, modules, multi-chip packages and other system solutions. The company’s business segments include the Compute and Networking Business Unit, the Mobile Business Unit, the Storage Business Unit, and the Embedded Business Unit.
Micron Technology CEO Mark Durcan disclosed in the company’s latest earnings call that it plans to embark on a restructuring program because of challenging market conditions.
To address the current market environment and strengthen our competitive position, we are implementing a number of initiatives to reduce costs, drive greater efficiencies, and increase focus on our strategic priorities,” Durcan explained.
Among these initiatives is a reduction in its global workforce, which is expected to result in savings of over $300 million for fiscal year 2017. Revenues for the third quarter of fiscal 2016 were slightly lower compared to the previous period as increases in sales of DRAM products were offset by decreases in sales of trade Non-Volatile products. As it turns out, the increase in DRAM revenues were also partially offset by an 11% decrease in prices. Meanwhile, trade Non-Volatile products decreased due to a 10% drop in units sales and a 6% decline in selling prices.
Also, the company’s overall consolidated gross margin of 17% for the third quarter of fiscal 2016 was 3% lower from the previous period primarily due to lower average selling prices partially offset by manufacturing cost reductions. With that, management expects and adjusted loss of $0.24 – $0.16 per share and revenue of $2.9 – $3.2 billion for the fourth quarter of the year.
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