Micron (MU  ) shares were 4% lower following the company's fiscal Q1 earnings report which showed the chip maker missing analysts' estimates on the top and bottom lines. Still, the results weren't entirely surprising given management's recent warnings about the tough environment for chip pricing and sales in addition to the results of other memory chip makers.

Overall, Micron shares are down 46% YTD and off by nearly 50% from its recent, all-time high in November of last year. Of course, this decline is following the stock more than tripling between March 2020 and November 2021. The biggest headwind for the company is that sales of consumer tech have precipitously declined due to a combination of purchases made during the pandemic fueled by stimulus payments which pulled forward demand and inflation and a weakening economy also negatively impacting demand.

Inside the Numbers

In its fiscal Q1, Micron reported a loss of $0.04 per share which was wider than analysts' expectations of a $0.02 per share loss. Revenue also missed expectations at $4.09 billion vs $4.13 billion. DRAM accounted for 67% of Micron's revenue, while Nand flash memory accounted for 27%.

Comparing Micron's performance to last year's fiscal Q1 reveals the downturn in the memory market. Last year, the company earned $2.16 per share and revenue of $7.7 billion. Its forecast for next quarter was also much worse than expected with a loss of $0.62 per share and revenue of $3.8 billion. In contrast, analysts were forecasting a loss of $0.32 per share and $3.9 billion in revenue.

In November, the company had already warned that it was reducing production due to weak demand and also revealed plans to cut costs. This was further affirmed following the earnings report as the company was reducing its headcount by 10% and also slashing year-end bonuses for executives. Another issue is that inventories are fully stocked across the industry, leading to plummeting prices. Of course, this is a 180-degree change from a year ago, when chipmakers had incredible pricing power and couldn't meet demand.

For Micron bulls, the silver lining could be that the stock didn't really materially decline despite the torrent of negative news. This could be an indication that the bad news is already priced in. Further, the long-term picture remains compelling especially as new technologies like AI, self-driving cars, and machine learning require incredible amounts of memory storage to function.