Micron Stock Rises After Beating On Earnings And Revenue

Micron Technology

Micron Technology Inc. (NASDAQ: MU) reported its fiscal third-quarter results after markets closed on Tuesday. The chipmaker smashed Wall Street’s earnings and revenue expectations despite escalating trade disputes between the Chinese government and the Trump administration.

Last month, the U.S. Commerce Department added Huawei Technologies Co Ltd to a list of Chinese firms that are barred from doing business with American companies, including Micron. However, Micron revealed Tuesday that it has resumed shipping some chips after reviewing the U.S. restrictions on selling software and hardware to Huawei.

“We determined that we could lawfully resume shipping a subset of current products because they are not subject to export administration regulations and entity list restrictions,” said Micron Technology President and CEO Sanjay Mehrotra. “However, there is considerable ongoing uncertainty surrounding the Huawei situation, and we are unable to predict the volumes or time periods over which we will be able to ship products to Huawei.”

Shares of Micron, which ended the regular trading session down 1.54%, rose 8.48% to change hands at $35.45 apiece in after-hours trading. The stock has rallied more than 11% since the beginning of the year and declined more than 40% in the past 12 months.

MU Earnings & Outlook

Micron had net income of $840 million, or $0.74 per share, down from $3.82 billion, or $3.10 per share, in the same period last year. Excluding one-time costs and gains, earnings came to $1.05 per share in the three months ended May 30, 2019.

On average, analysts surveyed by Refinitiv were expecting the company to come out with earnings of $0.79 per share.

The company reported revenue of $4.79 billion, compared with $7.8 billion in the third quarter of the previous year. Analysts had been calling for revenue of $4.69 billion, according to figures compiled by Refinitiv.

Looking ahead, Micron expects to report adjusted earnings of between $0.38 to $0.52 per share on revenue of $4.2 billion to $4.7 billion in the three months ending August. Analysts on average forecast adjusted earnings of $0.58 per share on revenue of $4.56 billion in the quarter.

“Micron’s improved competitive position and strong execution helped us deliver solid results despite a challenging environment,” said Mehrotra. “While we are seeing early signs of demand improvement, we plan to reduce our capital expenditures in fiscal 2020 to help improve industry supply-demand balance.”

Micron Technology Profile

Micron has historically focused on providing DRAM for PCs and servers. The firm has expanded into the NAND flash memory market over the past decade. It increased its DRAM scale with the purchase of Elpida (completed in mid-2013) and Inotera (completed in December 2016). – Warrior Trading News