Micron Technology’s Shares Jump on Strong Forecast
Micron Technology reported a better-than-expected quarterly profit and forecast current-quarter results above analysts’ estimates, as the chipmaker continues to benefit from higher prices for its memory chips amid tight supply.
The company’s shares (MU) were up about 4% in extended trading. Micron was the most actively traded among Nasdaq-listed stocks.
Micron said on Tuesday that average selling prices of dynamic random access memory (DRAM) chips, used in PCs and servers, jumped 8% in the fourth quarter.
According to research firm TrendForce, an increase in memory content for smartphones and robust end-demand from the server and data center markets will push the overall DRAM demand up in 2018.
The Boise, Idaho-based company has been boosted in recent quarters also by surging demand for its NAND memory chips, used to store data like music and photos on mobile devices. Average selling prices of NAND jumped 5% in the latest reported quarter.
“We expect the industry to remain moderately undersupplied for the rest of 2017 for both DRAM and NAND,” Chief Executive Sanjay Mehrotra, who took over the post in May, said on a post-earnings call.
The company said it expects adjusted revenue of $6.10 billion to $6.50 billion in the current quarter, above the average analyst estimate of $6.06 billion.
Micron forecast an adjusted profit of $2.09 to $2.23 per share for the quarter, again beating analysts’ expectation of $1.85 per share.
Micron’s compute and networking business unit (CNBU), which accounted for about 46% of the company’s total fourth-quarter revenue, reported a 7% rise in revenue.
Get Data Sheet, Fortune’s technology newsletter.
Net income attributable to Micron was $2.37 billion, or $1.99 per share, in the quarter ended Aug. 31, compared with a loss of $170 million, or 16 cents per share, a year earlier.
The company’s net sales jumped 90.8% to $6.14 billion.
Excluding items, Micron earned $2.02 per share, beating the average analyst estimate of $1.83, according to Thomson Reuters I/B/E/S.