Micron earnings and outlook top estimates, chip maker to sell Utah plant to Texas Instruments

Analysts surveyed by FactSet had forecast adjusted earnings of $1.72 a share on revenue of $7.23 billion. In late May, Micron said it expected revenue to come in “at or above” $7.3 billion, the high end of the guidance it provided at the end of March. where it forecast earnings of $1.55 to $1.69 a share.

“Micron set multiple market and product revenue records in our third quarter and achieved the largest sequential earnings improvement in our history,” Micron Chief Executive Sanjay Mehrotra said in a statement.

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. Like most semiconductors, memory chips have been in great demand during the COVID-19 pandemic, and prices have shot higher.

Read: The semiconductor shortage is here to stay, but it will affect chip companies differently

Micron said DRAM sales made up 73% of revenue, or $5.42 billion, in the fiscal third quarter, up from $3.59 billion in the year-ago period, while NAND accounted for 24% of revenue, or $1.78 billion, up from last year’s $1.67 billion. Analysts on average had expected DRAM sales of $5.25 billion, and NAND sales of $1.86 billion, according to FactSet.

The company said it expects demand for DRAM to grow more than 20% for the year, with NAND growth in the mid-30% range.

Micron expects adjusted fourth-quarter net income of $2.20 to $2.40 a share on revenue of $8 billion to $8.4 billion. Analysts had forecast $2.18 a share on revenue of $7.88 billion.

In a separate release, Micron said that it was selling its fabrication plant in Lehi, Utah, to Texas Instruments TXN, -0.30% for $1.5 billion. The company paid $1.5 billion for Intel Corp.’s INTC, -1.07% 49% interest in the joint venture in early 2019, and announced its plans to sell the fab earlier this year.

Shares of Boise, Idaho-based Micron were roughly flat in after-hours trading, when the results were released, following a 2.5% rise in the regular session to close at $84.89.

Over the past three months, Micron shares have slipped 1.8%, while the PHLX Semiconductor Index SOX, -0.11% has grown nearly 10%, the S&P 500 index  SPX, +0.13% has risen nearly 9%, and Nasdaq Composite Index COMP, -0.17% has gained 11%. During Micron’s third quarter, shares closed at $95.59 on April 12, just short of their all-time closing high of $96.56, set on July 14, 2000.