ReutersSep 27, 2019 05:16:00 IST
By Neha Malara
(Reuters) - Micron Technology Inc
The long-drawn U.S.-China trade war has impacted chipmakers already reeling under a saturated smartphone market, especially after the Trump administration blocked access to Huawei
While Micron has resumed some chip shipments to Huawei, the company said its sales to the Chinese smartphone maker could worsen in the coming quarters if the restrictions continue and if it fails to get licenses.
"We have applied for licenses with the U.S. Department of Commerce that would allow us to ship additional products, but there have been no decisions on those licenses to date," the company said on Thursday.
Micron said it expects adjusted profit in the range of 35 cents to 49 cents per share in the first quarter, below the analysts' average estimate of 48 cents.
The disappointing forecast came despite a rise in demand from China-based customers in recent months, which Micron said could be due to some of them building higher levels of inventory in the face of increased trade tensions.
"That inventory build by customers is nowhere close to the kind of inventory build that occurred in the second half of last year … that impacted the demand to producers in the first half of 2019," Micron Chief Executive Officer Sanjay Mehrotra told Reuters.
The chipmaker's tepid forecast weighed on other semiconductor stocks. Shares of Qualcomm
Hopes of a revival in global chip demand have lifted Micron's stock close to 50% so far in 2019, outpacing a 38% rise in broader Philadelphia Semiconductor index <.SOX> in the same period.
Net income attributable to the company fell to $561 million, or 49 cents per share, in the quarter ended Aug. 29, from $4.33 billion, or $3.56 per share, a year earlier.
Revenue fell 42.3% to $4.87 billion, but beat analysts' average estimate of $4.57 billion, according to IBES data from Refinitiv.
Excluding items, the company earned 56 cents per share, above analysts' expectations of 49 cents.
(Reporting by Neha Malara and Munsif Vengattil in Bengaluru and Noel Randewich in San Francisco; Editing by Arun Koyyur)
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