(Reuters) – Micron Technology Inc. said on Wednesday it expected a recovery in 2020, following a cyclical bottom during the second quarter of the year, that they had received all the required permits to supply some of the products that are the biggest customers, Huawei Technologies Co., Ltd.
FILE PHOTO: a Micron-Technology with solid-state drives for data center customers, was presented at a product launch event in San Francisco, california, USA, October 24, 2019 at the latest. REUTERS/Stephen Nellis
Shares of Micron, which increased by nearly 4% in extended trading, after its quarterly earnings beat Wall Street estimates, on rising demand for memory chips and, after a warm year.
Struggling to make sales in a slowing down of the memory market, Micron is faced with uncertainty in Washington, placed the Smartphone in a so-called entity list, in May, which effectively banned US companies sell to the Chinese company.
On Wednesday, with the announcement of the Huawei mobile licences, is in the midst of a tepid outlook for the second quarter, as the company’s Chief Executive Sanjay Mehrotra said that he expects the company to recover in the third quarter of the fiscal year by the year 2020.
“The recent trends in our business will give us the optimism that our second quarter will mark the bottom in our financial performance, and … with a continued recovery in the second half of the calendar year 2020,” Mehrotra told analysts at a post-transcription.
In June, Micron said that it had been established that a number of products that can be legally delivered to the Smartphone, while others had been excluded. It did not, however, disclose if they have received a license to the U.S. government started to award in the month of November.
The chipmaker said on Wednesday it had applied for licences, which make it possible to add support for a specific product, and branding of new products for Huawei mobile, and server business.
The users are not expected to have a material impact on the company’s revenue in the next quarter, Micron said. Sumit Sadana, Micron’s chief business officer, told Reuters in an interview that it could take up to a Micron in order to work with Huawei to ensure that the chips will work on the latest Huawei latest mobile phones.
“We believe that we will be able to see them working together, and the qualification of our products, and then in a few months we will be in a far better place, of course, on the assumption that there will be no changes in the terms of U.S. trade policy when it comes to Huawei,” Sadana said.
The Idaho-based company forecast second-quarter revenue of between $4.5 billion and $4.8 billion, while analysts had expected $4.78 billion.
Chipmakers are faced with a harrowing 17 months in the United States and China traded, rate of collapse, which reduced access to the Chinese market, one of the largest U.S. companies.
In the first quarter, Micron earned 48 cents per share on an adjusted basis, a penny above expectations.
Net income attributable to owners of the company decreased to a total of $491 million in the quarter that ended in Sep. 28, from $ 3.29 billion a year earlier.
Revenue fell to $5.14 billion from $7.91 billion, but beat estimates of $5.01 billion, according to IBES data, Refinitiv.
Reporting by Neha Malara and Nivedita Balu in Bengaluru and Stephen Nellis in San Francisco; Editing by Shinjini Ganguli and Richard Chang