Micron earnings beat forecasts, better PC sales fuel memory chip demand
By Noel Randewich SAN FRANCISCO (Reuters) - Memory chipmaker Micron Technology Inc posted fiscal third-quarter results above expectations and said pent up demand for personal computers is bolstering demand for its DRAM chips. For the first time, the U.S.-chipmaker offered a quarterly revenue forecast, which also exceeded analysts' estimates. But the company's recently high-flying stock was marginally lower in after hours trade. Micron said better-than-expected demand for personal computers was helping DRAM sales and that pricing for NAND chips was relatively stable. "Pent-up demand for corporate refresh on desktops and notebooks seem to be leading to better-than-expected sector performance," Micron President Mark Adams said on a conference call with analysts. "PC DRAM pricing is improving." Boise, Idaho-based Micron and some on Wall Street believe that recent industry consolidation is putting an end to extreme price volatility that in difficult years has left larger companies losing money and driven smaller players out of business. A more stable memory chip industry has made it possible for Micron to begin providing quarterly revenue forecasts to Wall Street, Adams later told Reuters in an interview. “It's stabilizing not just in terms of industry structure but because the end markets are more diversified, and that diversification tends to cloud out the major swings we saw in the past,” Adams said. Micron's quarterly results include bankrupt Japanese DRAM maker Elpida Memory, which the U.S. chipmaker acquired in July 2013 in a bid to improve economies of scale. Its stock has surged more than 33 percent in the past three months, helped by optimism about strong and stable prices for memory chips. Micron said in a statement on Monday its revenue jumped 72 percent to $3.98 billion (£2.3 billion) in the third quarter, which ended in May. Analysts on average expected revenue of $3.89 billion, according to Thomson Reuters I/B/E/S. Micron reported a net profit of $806 million, or 68 cents per share, compared with a net profit of $43 million, or 4 cents, a year earlier. Excluding items, Micron earned 79 cents per share. Analysts on average expected third-quarter earnings of 70 cents per share. Micron forecast revenue for the current quarter between $4 billion and $4.2 billion. Analysts had expected fourth-quarter revenue of about $4.06 billion. Shares of Micron were down 0.4 percent in extended trade after closing down 1.85 percent at $31.26 on Nasdaq. (Reporting by Noel Randewich; Editing by Lisa Shumaker, Bernard Orr)
