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Micron sales & earnings beat, sees signs of a pick up in demand

FILE PHOTO: the Memory of the chip and parts of the united states memory-chip maker, MicronTechnology be displayed at their booth at an industrial trade fair in Frankfurt, Germany, on July 14, 2015. REUTERS/Kai Pfaffenbach

(Reuters) – Micron Technology Inc. beat analysts ‘ estimates for its quarterly revenue and earnings on Tuesday, and the chipmaker says it’s seeing early signs of improvement in demand, sending its shares up more than 7% in extended trading.

Fish stocks, chipmakers have fallen in the past couple of months, as the demand for Apple’s iphone, fell, and prices of DRAM and NAND flash memory chips to sink a surplus, to add to that, a two-year-long, semi-conductor, everything was coming to a halt.

“While we are seeing the first signs of recovery in demand, we are planning to make capital expenditures in the current year to 2020 and to help improve the industry’s balance between demand and supply,” Chief Executive Officer Sanjay Mehrotra said.

To soften the blow of a market glut, Micron’s reduced output in support of prices, and increase investment in the next generation of chips.

The surplus, together with concerns about a slowdown in China, the world’s No. 2 economy, further compounded by an escalating trade war with the United States, will continue to squeeze revenues and profits from chipmakers.

Net income attributable to Micron declined to $840 million, or 74 cents per diluted share, in the third quarter, which ended on the 30th of May, up from $3.82 billion, or $3.10 per diluted share, a year earlier.

Sales fell to $4.79 billion from $7.80 billion, beating analysts ‘ estimates of $4.69 billion, according to IBES data, Refinitiv.

On an adjusted basis, the company earned $1.05 per share. Analysts were expecting a profit of 79 cents per share.

Reporting Sayanti Chakraborty in Bengaluru; Editing by Shounak Dasgupta

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