Micron shares tumbled 11% on Friday after the maker of memory and storage products said that the U.S. trade war with China is hurting the company’s business with Huawei.In May, the U.S. government added Huawei to the Entity List, meaning American companies could no longer do business with the Chinese manufacturer of communications equipment. Micron said that decision weighed on the company’s fourth-quarter results and threatens to harm its future financials.”In the fiscal fourth quarter, sales to Huawei declined sequentially and were down meaningfully from the levels we anticipated prior to the addition of Huawei to the Entity List,” Micron CEO Sanjay Mehrotra told investors during the earnings call. “We see ongoing uncertainty surrounding U.S.-China trade negotiations. If the Entity List restrictions against Huawei continue and we are unable to get licenses, we could see a worsening decline in our sales to Huawei over the coming quarters.”Overall, Micron’s business is holding up. The company reported fiscal fourth-quarter earnings of 56 cents per share on revenue of $4.87 billion, topping estimates of 49 cents per share for earnings and $4.57 billion for revenue, according to Refinitiv. Its earnings forecast for the first quarter was a bit below estimates, but revenue guidance was better than expected.Mehrotra said the company has applied with the Department of Commerce for licenses to ship additional products to Huawei “but there have been no decisions on licenses to date.”The Huawei ordeal is part of a broader trade war between the Trump Administration and China, in which both sides have levied tariffs on the other’s goods.Micron dropped $5.39 to close at $43.21 on Friday. The shares are still up 36% this year, beating the S&P 500, which has gained 18%.WATCH: Micron falls on earnings report
