Micron's stock declines as trade war declines Huawei's sales

Micron's shares fell about 5% in pre-market trading on Friday after the memory and storage product manufacturer said that the US trade war with China was hurting the company's business with Huawei.

In May, the US government added Huawei to the list of entities, which means that US companies could no longer do business with the Chinese manufacturer of communications equipment. Micron said the decision weighed on the company's fourth quarter results and threatened to hurt its future financial statements.

"During the fourth fiscal quarter, sales to Huawei declined sequentially and were significantly lower than anticipated levels prior to the addition of Huawei to the list of entities," said Micron CEO Sanjay Mehrotra. to investors. "We are seeing a lingering uncertainty around US-China trade negotiations, and if the restrictions on the list of entities against Huawei were maintained and we could not obtain licenses, we could see down our sales to Huawei in the coming quarters. "

Overall, Micron 's business is holding up. The company announced earnings of 56 cents per share for the fourth fiscal quarter of $ 4.87 billion, exceeding estimates of 49 cents per share for earnings and $ 4.57 billion for revenue, according to Refinitiv. Its earnings guidance for the first quarter was slightly lower than estimated, but revenue forecasts were better than expected.

Mehrotra said the company had applied to the Ministry of Commerce for licenses to ship additional products to Huawei "but no decision has yet been taken on the licenses."

Huawei's trial is part of a wider trade war between the Trump administration and China, in which both parties have levied tariffs on products from each other.

Micron shares are still up 53% this year, beating the S & P 500 index, up 18%

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