Shares of Micron Technology Inc. rose on Monday after the memory chip maker said sales increased in the third quarter and are expected to exceed expectations in the last period of its fiscal year.
Micron MU,
reported third-quarter net income of $ 803 million, or 71 cents per share, compared to $ 840 million, or 74 cents per share, in the same period last year. Adjusted earnings were 82 cents per share, compared to $ 1.05 per share in the same period last year. Revenue increased to $ 5.44 billion from $ 4.79 billion in the prior year quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of 75 cents a share on revenue of $ 5.27 billion. The shares gained more than 5% in after-hours trading immediately after the results were released, after a 1.4% gain in the regular session to close at $ 49.15.
Micron had already informed investors that it would exceed its original expectations. In late May, Micron forecast adjusted earnings of 75 cents to 80 cents per share and revenue of $ 5.2 billion to $ 5.4 billion, above its forecast of 40 cents to 70 cents per share in revenue of $ 4.6 billion. to $ 5.2 billion in March.
Micron specializes in DRAM and NAND memory chips. DRAM, or Dynamic Random Access Memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in USB drives and smaller devices, such as digital cameras. While the COVID-19 pandemic has been cited as a boost in memory chip sales, many analysts suspect it may have oversold the market, which could bode poorly for the second half of the year, but not according to Micron’s forecast.
For the fourth quarter, Micron forecast revenue of $ 5.75 billion to $ 6.25 billion, which would be a huge gain from a year ago and well ahead of analyst estimates. Analysts on average forecast sales of $ 5.46 billion, according to FactSet, after Micron reported revenue of $ 4.87 billion in the fiscal fourth quarter a year ago.
For the year, Micron shares are discounted by around 10%, while the PHLX SOX semiconductor index,
SOX
It was up 4%. Meanwhile, the S&P 500 SPX Index,
is down 6%, and the Nasdaq Composite Index for Heavy Technology,
Up 9%.
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