Micron sources on demand for chips, as company expects ‘record revenue’ in 2022

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Memory chipmaker Micron Technology (NASDAQ: MU) saw its shares jump after trading following its earnings releases, which exceeded expectations, combined with optimistic financial forecasts thanks to growing demand for its chips, mainly data centers and electric vehicles (EVs).

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Shares have climbed nearly 7% in after-hours trading following its call for better-than-expected earnings, Seeking Alpha reported. As of midday on December 21, the stock was up nearly 11%.

For the first quarter of fiscal 2022, which ended Dec. 2, Micron’s revenue was $ 7.69 billion, compared with $ 5.77 billion in revenue during the same period a year ago, the statement said.

Sanjay Mehrotra, chairman and chief executive officer, said in a Dec. 20 statement that the company’s forecast for With FQ2 is expected revenue of $ 7.5 billion, and earnings per share are expected to be $ 1.95: “Our FQ1 results and FQ2 outlook keeps us on track to generate record revenues, strong profitability and free cash flow in fiscal 22.”

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Those numbers compare to analysts’ average estimate of $ 7.32 billion and projected EPS of $ 1.86, according to Bloomberg.

In a call for results, Mehrotra said he expects the automotive and industrial sectors to be the fastest growing memory and storage markets over the next decade, “and we are exceptionally well positioned as a market share leader with more than 10% of our revenues coming from them. markets, ”according to a transcript of the call. He added that the new electric vehicles “are becoming like a data center on wheels.”

“Automotive and industry will certainly be strong growth engines for us throughout the cycle. I spoke to all of the demand drivers in the auto market. Micron is clearly an automotive leader in this space, ”Mehrotra said on the call. “And this year, we expect to continue to grow based on all of our experience in this market, our leadership position, the high quality we offer, and the growing demand for memory and storage content on these. markets. “

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CFRA Research maintained its “Buy” opinion on Micron after the results were released. “We remain optimistic about the supply / demand momentum in CY 22 and believe investors continue to underestimate the improvement in MU’s financial position ($ 4.5 billion in net cash), with at least 50 % of FCF to be returned to shareholders. We are seeing a continued shift towards high margin offerings (DDR5, SSD) that support a better margin profile, ”wrote Angelo Zino, senior equity analyst at CFRA Research, in a note to GOBankingRates.

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About the Author

Yael Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She has also worked as a vice president / senior content writer for major New York-based financial firms including New York Life and MSCI. Yael is now a freelance writer and most recently co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare”, with Dr Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, one in journalism from New York University and one in Russian studies from Toulouse-Jean Jaurès University, France.

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