Micron Technology shares jump nearly 5 percent after projecting memory chip recovery. On Wednesday, U.S. chipmaker Micron Technology said a recovery in the memory chip market is coming.
Its quarterly profit also beat analyst’s revenue expectations, sending its shares up nearly 5 percent. The company reported that cost controls helped offset declining demand and prices.
The company makes many forms of semiconductor devices including, USB flash drives, solid-state drives, NAND storage chips (used in phones and internet servers) as well as DRAM chips.
However, Micron had forecasted revenue estimates below Wall Street’s expectations, but the company now reported that the demand would see growth again by its fourth quarter.
The Boise, Idaho-based company posted around $1 billion in free cash flow and a profit of $1.71 per share for its fiscal second quarter. At the time, the earnings also beat Wall Street expectations of $1.67 but were down from $2.82 a year earlier.
Chief Executive Sanjay Mehrotra said in an interview: “Certainly Micron has not been in a situation before where it’s been able to deliver such healthy profitability and cash flow in an adverse industry environment,”
For its fiscal third quarter, Micron now announced that its revenue would be between $4.6 billion and $5 billion. Micron executives said that the company reduced capital expenditures to $9 billion for this fiscal year, marking drop between $9 billion and $9.5 billion from a previous forecast. Revenue dropped from $7.35 billion to $5.84 billion, beating estimations of $5.3 billion.