Micron Technology Inc. reported earnings and an outlook that surpassed Wall Street expectations Wednesday, and the chip maker also announced it was selling one of its facilities to Texas Instruments Inc.
For the fiscal third quarter, Micron
reported net income of $1.74 billion, or $1.52 a share, compared with $803 million, or 71 cents a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation expenses and other items, were $1.88 a share, compared with 82 cents a share in the year-ago period. Revenue rose to $7.42 billion from $5.44 billion in the year-ago quarter.
Analysts surveyed by FactSet had forecast adjusted earnings of $1.72 a share on revenue of $7.23 billion. In late May, Micron said it expected revenue to come in “at or above” $7.3 billion, the high end of the guidance it provided at the end of March. where it forecast earnings of $1.55 to $1.69 a share.
“Micron set multiple market and product revenue records in our third quarter and achieved the largest sequential earnings improvement in our history,” Micron Chief Executive Sanjay Mehrotra said in a statement.
Micron specializes in DRAM and NAND memory chips. DRAM, or dynamic random access memory, is the type of memory commonly used in PCs and servers, while NAND chips are the flash memory chips used in smaller devices like smartphones and USB drives. Like most semiconductors, memory chips have been in great demand during the COVID-19 pandemic, and prices have shot higher.
Read: The semiconductor shortage is here to stay, but it will affect chip companies differently
Micron said DRAM sales made up 73% of revenue, or $5.42 billion, in the fiscal third quarter, up from $3.59 billion in the year-ago period, while NAND accounted for 24% of revenue, or $1.78 billion, up from last year’s $1.67 billion. Analysts on average had expected DRAM sales of $5.25 billion, and NAND sales of $1.86 billion, according to FactSet.
The company said it expects demand for DRAM to grow more than 20% for the year, with NAND growth in the mid-30% range.
Micron expects adjusted fourth-quarter net income of $2.20 to $2.40 a share on revenue of $8 billion to $8.4 billion. Analysts had forecast $2.18 a share on revenue of $7.88 billion.
In a separate release, Micron said that it was selling its fabrication plant in Lehi, Utah, to Texas Instruments
for $1.5 billion. The company paid $1.5 billion for Intel Corp.’s
49% interest in the joint venture in early 2019, and announced its plans to sell the fab earlier this year.
Shares of Boise, Idaho-based Micron were roughly flat in after-hours trading, when the results were released, following a 2.5% rise in the regular session to close at $84.89.
Over the past three months, Micron shares have slipped 1.8%, while the PHLX Semiconductor Index
has grown nearly 10%, the S&P 500 index
has risen nearly 9%, and Nasdaq Composite Index
has gained 11%. During Micron’s third quarter, shares closed at $95.59 on April 12, just short of their all-time closing high of $96.56, set on July 14, 2000.