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StockBeat: Micron's Wings Clipped as UBS Downgrades Outlook

Published 11/08/2019, 01:28 PM
Updated 11/08/2019, 01:40 PM
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Investing.com – Micron (NASDAQ:MU) is up about 50% for the year, but UBS cut its outlook on the chipmaker Friday amid worries that falling memory prices are likely to keep a lid on growth.

UBS said it was taking "a more cautious view on NAND pricing" through next year and cut its earnings and revenue estimates on the company for 2020 and 2021. Micron fell 1.5%.

Micron has forecast adjusted earnings in the range of 39 cents to 53 cents a share on revenue of $4.8 billion to $5.2 billion for the first quarter of its new fiscal year, the holiday quarter.

That was below estimates from Wall Street for earnings of 53 cents a share on revenue of $4.8 billion on average, according to FactSet.

Others seem to agree. Nomura said memory prices are continuing to slide and warned that "the December-quarter outlooks of many of the broader-based chip companies suggest ongoing softness."

But it’s not just Micron reeling under the pressure of falling memory prices.

Samsung (KS:005930) recently reported that semiconductor revenues declined 29% year over year to about $15 billion in the third quarter of the year, as margins were hurt by a sharp decline in both NAND and DRAM prices.

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