(Reuters) – U.S. chipmaker Micron Technology Inc beat analysts estimates for quarterly revenue and profit on Wednesday, getting a lift from the demand for the memory chips used in data centers.
The logo of the AMERICAN memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach
The company’s shares, which have gained about 27 percent this year, were marginally higher in the turbulent after-market trading, boosted by a share buyback and the supervision on the expenditure.
The results come against the backdrop of a glut in the global semiconductor industry caused by declining demand for smartphones and spotty purchasing behaviour by cloud computing suppliers, which are harmful for chipmakers such as Intel Corp earlier this year.
“While we expect industry headwinds in the near future, we continue to grow and diversify our product portfolio, improve our cost competitiveness and to lay the foundation to emerge stronger, both financially and operationally, of this environment,” Micron Chief Executive Sanjay Mehrotra told investors during a conference call.
Chipmakers are recovering from a long-term trade war between the United States and China. Micron warned in September that the AMERICAN tariffs on Chinese goods would weigh on the financial results for as much as a year. Micron is looking to weather the slowdown by investing more in next-generation chips, as well as reduction of the production.
Net income attributable to the company fell to $1.62 billion, or $1.42 per share, in the second quarter that ended Feb. 28, from $3.31 billion, or $2.67 per share, a year earlier. Sales fell to $5.84 billion from $7.35 billion.
Excluding items, the company earned $1.71 per share.
Analysts on average had expected a profit of $1.67 per share and revenue of $ 5.82 billion, according to the IBES data of Refinitiv.
Micron said investment, a figure closely watched by investors, were $2.45 billion for the quarter. The company in December told investors it expected capital expenditures for the 2019 fiscal year, between $9 billion and $9.5 billion.
The company said it purchased 21 million shares are ordinary shares, for $702 million euros during the quarter as part of the $10 billion share buyback program, leaving a net cash position of $2.99 billion.
Reporting by Sayanti Chakraborty in Bengaluru and Stephen Nellis in San Francisco; Editing by Sriraj Kalluvila and Leslie Adler