Micron posts mixed earnings results as chip demand worsens

Yahoo Finance Live anchors discuss fourth-quarter earnings for Micron.

Video transcript

[AUDIO LOGO]

BRIAN SOZZI: Welcome back. We can't get to that closing bell quick enough, after another tough week for the markets. But before we get there, we will have an opening bell on Wall Street.

And along with that, let's hit a premarket mover in Micron. Shares a Micron in focus after the chipmaker reported mixed Q4 results and another muted outlook for revenue. And I would argue, it's more than muted.

So Micron out here with an outlook for sales for the current quarter, $4.25 billion. That would be down 36% quarter-over-quarter. The Street was about at $6 billion. So that is a whopping, huge, FedEx-like earnings guidance whiff here by Micron.

You hop into the conference call. You have the CEO and the CFO talking at length about worsening demand backdrop for its various chips. And in some cases, they used the term, "significantly worsening." So you did not get the sense that things are getting better any time soon for Micron.

But still, the stock is not falling off the cliff. You read some of the analyst commentary out this morning. And some are starting to view that the bottom is, perhaps, in Micron shares because things can't get any worse.

BRAD SMITH: Yeah, and I mean, this just kind of joins the wave of other chip companies that had already either warned or just had dismal quarters themselves. And it's really in the face of some of the demand and the macroeconomic conditions that all of them are citing.

But I'd love them to go even more into whatever those macroeconomic conditions are. Because we know, of course, that a lot of companies, even as they're citing this within their earnings reports, it's everything from how much you're paying employees, all the way to-- these macroeconomic conditions can range from that to citing, you know, war between Russia and Ukraine, like, so if we're getting more specific, specifically around the chip market.

One thing that did stick out over the quarter, they said, softening macroeconomic conditions have led some customers to reduce purchases--

BRIAN SOZZI: I was gonna cite that.

BRAD SMITH: --of dram--

[LAUGHTER]

That's what you were gonna say?

BRIAN SOZZI: I was gonna say, I was gonna follow it up because they had followed it up after that, saying, "the long-term outlook remains strong."

BRAD SMITH: Right. [LAUGHS] yeah.

BRIAN SOZZI: Well, yeah, long-term-- we're not even gonna be here anymore. What is long-- I'm just getting tired of some of these conference calls. I can't take it, Brad.

BRAD SMITH: Like, just--

BRIAN SOZZI: What are u guys talking about?

BRAD SMITH: We just need--

BRIAN SOZZI: Your quarter stunk and you-- you warned by $2 billion. Just tell it to us straight and take the analyst questions.

BRAD SMITH: Right, just quantifying, I think, a little bit more of what that outlook actually is, whether that's, you know, what we heard from Nike in two to three years or whether that's what we heard from VF Corp in five years from now. Of course, over a five-year period, perhaps, things will start to turn around.

And especially in the chip market, where we know that there are so many investments breaking ground within this industry, to bring some of that capacity domestically here in the US. That should do wonders. And you would hope that by that time, five years out from now, that we're seeing much more of the ramp up in capacity and the nanomanufacturing that needs to take place in this industry, too.

And so for Micron, for AMD, for-- I mean, it's been a dismal week for the semiconductor stocks, as we've been tracking this--

BRIAN SOZZI: But in the long term, Brad, everything looks great.

BRAD SMITH: No, it's great.

BRIAN SOZZI: It's amazing.

BRAD SMITH: Long term--

BRIAN SOZZI: Nike sneakers are gonna be selling, we're gonna be buying Micron chips, and life is beautiful.

BRAD SMITH: Long term, we own houses, too.

BRIAN SOZZI: Yeah, well, I don't know about that.

BRAD SMITH: Yeah, exactly.