Micron Technology Inc, the largest US maker of memory chips, reported fiscal second-quarter revenue that exceeded estimates amid a rebound in chip shipments. The shares jumped in extended trading.
Sales rose 3.4 percent to US$2.08 billion from US$2.01 billion a year earlier, the Boise, Idaho-based company said in a statement on Thursday.
Analysts on average estimated revenue of US$1.91 billion, according to data compiled by Bloomberg.
Market prices for memory chips, which store information in computers and mobile devices, have surged this year as manufacturers such as Micron, Samsung Electronics Co and SK Hynix Inc have kept production steady.
Micron, which yesterday reported its seventh consecutive quarterly loss, plans to strengthen its industry position by acquiring Japan’s Elpida Memory Inc in a deal scheduled to close in the first half.
“There is no doubt that fundamentals in the business are changing,” Doug Freedman, an analyst at RBC Capital Markets in San Francisco, said in an interview.
He has an outperform rating on the company’s shares.
While demand for personal computers is not growing, supply of memory chips is limited and some customers are “on allocation,” meaning they cannot get all that they order, Micron president Mark Adams said.
“Even though PC growth is relatively flat, the supply is actually reflecting that and right now it’s actually tight,” Adams said in an interview. “We continue to feel better about the operating environment, and the business. We think we’re on the path to profitability.”
The net loss for the period ended Feb. 28 widened to US$286 million, or US$0.28 a share, from US$282 million, or US$0.29, in the same period a year earlier. Analysts on average estimated a loss of US$0.20.
Micron makes dynamic random access memory, or DRAM, which provides the main memory in PCs. It also makes NAND flash memory, chips that provide the storage in mobile devices such as smartphones and tablets.
DRAM revenue rose 24 percent in the quarter compared with the prior period. While prices on average dropped 10 percent, it sold 38 percent more chips, the company said.
Nand unit sales increased 13 percent from the first quarter’s, providing an 8 percent increase in revenue.
In July, Micron agreed to acquire bankrupt Elpida for ￥200 billion (US$2.11 billion). The transaction is aimed at grabbing control of more supply and bolstering a challenge to industry leader Samsung Electronics. Elpida, the last Japanese maker of computer-memory chips, sought bankruptcy protection last year after losses left it unable to pay debts.
On Feb. 28, Elpida said it won Tokyo District Court approval for the sale to Micron, clearing the last major hurdle in the takeover. The required majority of creditors backed the plan, according to a statement from the trustees of the Tokyo-based company.
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