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Micron Technology Inc. rose in the extended session Wednesday after the memory-chip maker forecast that the current quarter would be the “bottom” of a rough period.
Micron MU, +0.08% shares rose 4.2% in after-hours trading following the release of quarterly results, following a 0.1% rise in the regular session to close at $53.04. Shares have been trading at their highest levels since July 2018, as analysts see signs of improvement in the memory-chip industry, which has spent 2019 trying to dig out of an inventory glut in memory chips that decimated sales.
“With our strong execution and improving industry conditions, we are optimistic that Micron’s fiscal second quarter will be the cyclical bottom for our financial performance,” Micron president and chief executive Sanjay Mehrotra said in a statement.
The company reported fiscal first-quarter net income of $491 million, or 43 cents a share, compared with $3.29 billion, or $2.81 a share, in the year-ago period. Adjusted earnings were 48 cents a share. Revenue declined to $5.14 billion from $7.91 billion in the year-ago quarter.
Micron projected fiscal second-quarter adjusted earnings of 29 cents to 41 cents a share on revenue of $4.5 billion to $4.8 billion, while analysts forecast earnings of 39 cents a share on revenue of $4.75 billion.
Analysts surveyed by FactSet had expected earnings of 47 cents a share on revenue of $4.99 billion, while Micron had forecast earnings of 39 cents to 53 cents a share on revenue of $4.8 billion to $5.2 billion.
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 USB drives and smaller devices such as digital cameras.
For the year, Micron shares are up 67%, with the bulk of that growth coming in the past six months. That compares with a 58% rise in the PHLX Semiconductor Index SOX, -0.09%, a 27% rise in the S&P 500 index SPX, -0.04%, and a 33% gain in the tech-heavy Nasdaq Composite Index COMP, +0.05%.
Of the 35 analysts that cover Micron, 18 have overweight ratings, nine have hold ratings, and three have underweight or sell ratings, along with an average target price of $57.77, according to FactSet data.
