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Micron Technology Drops on Weak Outlook for First Quarter

Micron topped analysts' fourth quarter expectations but provided tepid outlook for the first quarter.

Shares of Micron Technology  (MU) - Get Micron Technology, Inc. (MU) Report dropped after hours Tuesday despite the company reporting fourth-quarter results that were ahead of analyst expectations. 

The Boise, Idaho-based company reported non-GAAP net income of $2.78 billion, or $2.42 per share, on revenue of $8.27 billion. Analysts were expecting the company to report earnings of $2.33 per share on revenue of  $8.23 billion. 

“Micron’s outstanding fourth quarter execution capped a year of several key milestones,” said Micron Technology President and CEO Sanjay Mehrotra in a statement. “In fiscal 2021, we established DRAM and NAND technology leadership, drove record revenues across multiple markets, and initiated a quarterly dividend." 

However, for the fiscal first quarter of the year, the company expects revenue between $7.45 billion and $7.85 billion while analysts are modeling for revenue of $8.54 billion, according to FactSet.

Expected non-GAAP earnings between $2 and $2.20 per share are also below analysts consensus estimates of $2.53 per share. 

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"The demand outlook for 2022 is strong, and Micron is delivering innovative solutions to our customers, fueling our long-term growth," Mehrota said despite the timid revenue and earnings outlook. 

Micron shares were down 3.45% to $70.58 per share in after hours trading Tuesday. 

The company reported an operating cash flow of $3.88 billion vs. $3.56 billion in the prior quarter. The company finished the year with an operating cash flow of $12.47 billion vs. $8.31 billion for the prior year. 

Analysts at JPMorgan and Mizuho cut their price targets on the company last week.

JPMorgan’s Harlan Sur cut his price target to $100 from $140 but affirmed his overweight rating.

Mizuho Securities analyst Vijay Rakesh trimmed his price target to $97 from $107, while reiterating a buy rating on the stock.