Micron shares soar after earnings top Wall Street estimates

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Micron shares soar after earnings top Wall Street estimates

Micron Technology Inc. shares soared in the extended session Monday after the memory-chip maker's earnings and outlook topped Wall Street estimates.

Micron MU shares rallied 7% after a 1.2% decline in the regular session to close at $82.03.

In the first quarter, Micron reported net income of $2.31 billion, or $2.04 a share, compared to $803 million, or 71 cents a share, in the year-ago period. The adjusted earnings, which excludes stock-based compensation expenses, were $2.16 a share, compared to 78 cents a share in the year-ago period.

Revenue rose to $7.69 billion from $5.77 billion in the year-ago quarter.

The analysts who were surveyed by FactSet had forecast adjusted earnings of $2.10 a share on revenue of $7.68 billion, based on Micron's forecast of $2 to $2.20 a share on revenue of $7.45 billion to $7.85 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 smaller devices like smartphones and USB drives. Memory chips, like most semiconductors, have been in great demand during the COVID 19 epidemic, and prices have shot higher.

The company said it spent $3.27 billion on capital expenditures in the first quarter.

Micron said DRAM sales made up 73% of revenue, or $5.61 billion, for a 38% year-over-year gain, while NAND accounted for 24% of revenue, or $1.85 billion, up 19% year over year. Analysts had expected DRAM sales of $5.54 billion and NAND sales of $2 billion, according to FactSet.

In a statement, Sanjay Mehrotra, Micron's chief executive, said we are now shipping our industry-leading DRAM and NAND technologies across major end markets. Micron expects to have adjusted second-quarter net income of $1.85 to $2.05 a share on revenue of $7.3 billion to $7.7 billion. The analysts had forecast a share of $7.29 billion for $1.84 a share on revenue.

Over the past 12 months, Micron shares have gained 15%, while the PHLX Semiconductor Index SOX has risen 35%, the S&P 500 Index SPX has gained 23%, and the tech-heavy Nasdaq Composite Index COMP has gone up nearly 18%. Micron shares closed at $95.59 on April 12, just short of their all-time closing high of $96.56, set on July 14, 2000.