Micron Expects Increased Revenues As Demand Grows
Micron Technology has forecast that in the present quarter it will record profits and revenue that are better than expected. This will be due to an improvement in memory chip prices following a period of tight supply. There has also been an increase in demand from smartphone makers and providers of cloud services. Shares of the technology firm which have already appreciated 44% since the year begun rose marginally once trading started.
“We expect healthy industry demand to persist into 2018, reflecting broader trends in the data center and mobile markets,” said Sanjay Mehrotra, the chief executive officer of Micron Technology Inc in a conference call with investors and analysts.
DRAM chip prices
As a result of increasing demand from a personal computer industry that is stabilizing and a cloud services sector that is growing rapidly, the prices of DRAM chips that are used in servers and PCs have risen sharply. In the case of Micron Technology prices for its DRAM chips increased by 14% in fiscal Q3. Over 60% of Micron’s revenues are derived from DRAM chips. Analysts expect that the smartphone sector will also contribute to the demand for its chips especially with Apple set to launch its next iPhone in the next few months.
Across the globe personal computer shipments increased by 0.6% in 2017’s first quarter. This was the first time growth was being recorded in the sector in five years according to IDC, a market research firm. There has also been an increase in demand for chips from the motor vehicle industry.
In the fourth quarter, Micron expects revenues to range between $5.70 billion and $6.10 billion while profits per share will come in at between $1.73 and $1.87. Consensus estimates have forecast the revenue to come in at $5.6 billion.
In the previous quarter the technology company that is based in Boise, Idaho reported profits and revenues that were better than had been estimated. Micron’s net income in fiscal Q3 which ended at the beginning of this month came in at $1.65 billion which translated to $1.40 a share. A year ago Micron Technology recorded $215 million in net loss or 21 cents a share, a big improvement.
Revenues almost doubled as the figure rose to $5.57 billion. When items were excluded Micron Technology earned approximately $1.62 a share. Analysts had forecast revenues to come in at $5.41 billion and profits to be $1.51 a share.