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Micron raises third-quarter revenue forecast

FILE PHOTO: Micron Technology's solid-state drive for data center customers is presented at a product launch event in San Francisco, U.S., October 24, 2019. REUTERS/Stephen Nellis

(Reuters) - Micron Technology Inc MU.O raised its revenue forecast for the third quarter on Wednesday to a range of $5.2 billion (4.2 billion pounds) to $5.4 billion from $4.6 billion to $5.2 billion, sending its shares about 3% higher.

The memory chipmaker said in a regulatory filing (here) that it expected adjusted earnings between 75 cents per share and 80 cents per share.

“We had strong demand from our customers – notably in the data center space – and that demand has been driven mostly due to the work-from-home economy, the increased load on the server infrastructure because of everyone working from home, entertaining from home,” Sumit Sadana, Micron’s chief business officer, told Reuters in an interview.

Sadana said Micron also saw increased sales of server chips to retailers expanding their e-commerce operations to handle extra demand while many physical retail locations were shuttered during the novel coronavirus pandemic. Micron also saw increased sales of laptop memory chips for work and education at home.

Analysts had expected a revenue of $4.93 billion and adjusted earnings of 56 cents per share, according to IBES data from Refinitiv.

South Korean chip stocks rose on Thursday on Micron’s third-quarter revenue guidance.

Shares of Samsung Electronics Co Ltd 005930.KS, the world's biggest memory chip maker, rose as much as 2.6% to 51,2000 won, while domestic rival SK Hynix 000660.KS gained 4.4% to 85,000 won by 0109 GMT. The benchmark KOSPI market .KS11 was trading up 0.9%.

Reporting by Ayanti Bera in Bengaluru and Stephen Nellis in San Francisco; additional reporting by Heekyong Yang in Seoul; editing by Uttaresh.V and Sonya Hepinstall

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