Micron says memory chip recovery is coming later in the year, sending shares higher


For its fiscal second quarter, Micron generated nearly $1 billion in free cash flow and a profit of $1.71 per share, excluding items. That was down from $2.82 a year earlier but above Wall Street expectations of $1.67, according to IBES data from Refinitiv.

“Certainly Micron has not been in a situation before where it’s been able to deliver such healthy profitability and cash flow in an adverse industry environment,” Chief Executive Sanjay Mehrotra said in an interview with Reuters.

Kinngai Chan, an analyst with Summit Insights Group, said investors were focusing on the outlook for a recovery in the second half of the calendar year, with the fiscal third quarter forecast representing “the bottom for Micron’s near-term sales and gross margin.”

The Boise, Idaho-based company said on Wednesday it expects revenue between $4.6 billion and $5 billion for its fiscal third quarter, falling short of analyst expectations of $5.3 billion according to IBES data from Refinitiv. The company cut planned capital expenditures for the 2019 fiscal year to $9 billion, Micron executives said, down from a previous forecast of between $9 billion and $9.5 billion.

Revenue fell to $5.84 billion from $7.35 billion, beating expectations of $5.3 billion.

The company said it bought back 21 million shares of its common stock for $702 million during the quarter as part of its $10 billion share buyback program, leaving a net cash position of $2.99 billion.



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