Micron Shares And Quarter Forecast Rise Following Its Q2 Report

micron chip
Micron revealed better than expected results in its second quarter earnings call.

March 23rd saw the release of the Micron Technology, Inc’s second-quarter report. Following this earnings call, the company’s share rose increased based on the results and the increased forecast.

Micron And The Electronics Market

Micron Technology, Inc is a global corporation based in Idaho. It is the producer of various forms of semiconductor devices. For example, dynamic random-access memory, solid-state drives, or flash memories. It is considered as one of the Top 5 semiconductor companies on a worldwide level. Micron markets its consumer products under two brand names. These are Lexar and Crucial Technology.

On March 23rd, the company released its second quarter earnings call. Its profits and updated yearly forecast beat the market expectations. Micron revealed a $4.65 billion revenue. This was 58 percent higher when compared to the same period last year. Also, the company revealed an adjusted earnings per share value of $0.90.

Both results surpassed market estimates. Analysts were expecting a $4.64 billion in revenues with an adjusted earnings per share value of $0.84.

Micron then went to reveal its adjusted third-quarter forecast. The modification was based on the better than expected Q2 results. As such, the company is expecting a $5.2 billion to $5.6 billion revenue. Analysts were expecting a $4.74 billion value.

The profit per share margin was also adjusted. This is now expected to reach around $1.43 to $1.57. The projection beats the market estimates which forecast a $0.91 such value.

The Market Changes Behind Micron’s Q2 Report

According to its earnings call, the company beat expectation based on several factors. One of them was the 21 percent sequential rise in its ASP or average selling price. It was also based on the market’s demand for more electronic components.

Micron reported a 64 percent annual increase of its DRAM or dynamic random access memory revenue. This segment makes up 64 percent of the company’s total revenue value. During the second quarter, the DRAM jumped by 21 percent. Over the first quarter, they registered a 5 percent increase.

But it was not the only product to mark a rise. Micron’s NAND chips revenue also increased by 38 percent. They make up for 30 percent of the total company revenue. Over the second quarter, NAND chip sales registered an 18 percent increase.

According to most market analysts, this rise in based on the market’s increasing demands for such technological solutions. This trend may continue as it tracks the technology industry, more exactly the smartphone one, as it registered a significant growth in the storage capacity within them.

“We saw continued gains in client DRAM pricing, but also benefited from increases in mobile, cloud, and enterprise pricing as well.” This is according to Mark Duncan, the Micron Chief Executive Officer.

Following its Thursday earnings call, the company stock also registered an increase. As the market closed, this was valued at $26.47. The value marked a 1.57 percent increase when compared to the prior trading session. Micron’s second quarter ended on March 02nd. Currently in its third quarter, this will end in May 2017.

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