Micron beats expectations, forecast to beat forecasts

Micron Technology delivered stronger quarterly results than Wall Street expected as data centers and electric vehicle manufacturers drove demand for its chips, and it forecast second-quarter sales and profits will beat estimates with chip shortages easing in 2022.

Micron has struck deals with its suppliers to deal with bottlenecks in its supply chain.

The company makes both the NAND memory chips that serve the data storage market and the DRAM memory chips that are widely used in data centres, personal computers and other devices. Micron shares rose 5.7 per cent to US $87.70 in extended trading after the results.

Micron, one of the world's biggest memory chip suppliers, has been able to charge higher prices because of strong demand and industry-wide shortage of chips. Micron said that data centre revenue grew 70 per cent and automotive revenue grew 25 per cent, with the growth coming from the increasing amount of memory required in cars with advanced driver safety systems.

Micron's chief business officer, Sumit Sadana, told Reuters that they are seeing dramatic step ups and some of the new model cars.

Sadana said that Micron officials expect non-memory chip shortages to start next year. The shortages have stifled shipments of cars and personal computers.

We are starting to see an improvement on that front. He said that much of the improvement will occur through the calendar year 2022.

The company expects revenue for the current fiscal second quarter to be US $7.5 billion, plus or minus US $200 million, compared to analysts' average estimate of US $7.27 billion, according to Refinitiv data. The company forecast adjusted earnings per share of US $1.95, plus or minus 10 cents, beating analyst estimates of US $1.86, according to Refinitiv data.

The first quarter, Micron reported sales of US $7.69 billion, above analyst expectations of US $7.67 billion, according to Refinitiv data. Micron earned $2.16 per share on an adjusted basis, beating expectations of US $2.11 per share.