Micron shares fall after quarterly report — CNBC
In the United States, shares of memory maker Micron declined after the release of quarterly results that Jim Cramer described as strong. At the same time, he said he was maintaining his position in the company’s shares despite short-term pressure on their value, CNBC reports.
Concerns over margins and production
According to CNBC, investors may have been unsettled by Micron’s forecast for gross margin in the first quarter, as well as the company’s plans to increase capital expenditures on production capacity. Part of the market fears this could lead to an oversupply of memory and affect prices.
At the same time, Micron reported 26 strategic agreements with customers, compared with 16 in the previous quarter. As noted in the article, such arrangements give the company greater certainty about future demand. Cramer called Micron’s prospects for the next several years the best he has heard, but acknowledged that the shares could continue to decline in the near term.
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Potential share buyback
An additional factor for Micron shares could be December, when restrictions related to U.S. government funding will end. After that, the company will be able to direct accumulated funds toward a potentially significant buyback of its own shares.
On the same day, the U.S. stock market overall was declining amid rising yields on long-term U.S. Treasury bonds. The yield on 10-year securities reached 5.34%, the highest level since 2002. The market was also affected by the rise in the price of West Texas Intermediate oil above $92 per barrel.
