Memory chipmaker Micron Technology Inc (NASDAQ:MU) posted fiscal third-quarter results above expectations and said pent up demand for personal computers is fueling demand for its DRAM chips.
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The U.S.-chipmaker gave a quarterly revenue forecast that also exceeded analysts' estimates but its recently high-flying stock was marginally lower in after hours trade.
The company said better-than-expected demand for personal computers was helping DRAM sales and that pricing for NAND chips was relatively stable.
"Pent-up demand for corporate refresh on desktops and notebooks seem to be leading to better-than-expected sector performance," Micron President Mark Adams told analysts on a conference call. "PC DRAM pricing is improving."
Boise, Idaho-based Micron and some on Wall Street believe that recent industry consolidation will put an end to extreme price volatility that in difficult years has left larger companies losing money and driven smaller players out of business.
Prices for DRAM and NAND chips have been bolstered by limited amounts of investment in new production capacity by Micron and rivals Samsung Electronics Co Ltd and SK Hynix Inc.
"The supplier base has consolidated in DRAM and stabilized in NAND, and we believe that in both markets the industry is in a stage of maturity such that each supplier has sufficient scale to compete," Chief Executive Marc Durcan said on the call.
Micron's quarterly results include bankrupt Japanese DRAM maker Elpida Memory, which the U.S. chipmaker acquired in July 2013 in a bid to improve economies of scale.
Its stock has surged more than 33 percent in the past three months, helped by optimism about strong and stable prices for memory chips. Micron said in a statement on Monday its revenue jumped 72 percent to $3.98 billion in the third quarter, which ended in May. Analysts on average expected revenue of $3.89 billion, according to Thomson Reuters I/B/E/S.
Micron reported a net profit of $806 million, or 68 cents per share, compared with a net profit of $43 million, or 4 cents, a year earlier.
Excluding items, Micron earned 79 cents per share. Analysts on average expected third-quarter earnings of 70 cents per share.
On a conference call with analysts, the company also forecast revenue for the current quarter between $4 billion and $4.2 billion. Analysts had expected fourth-quarter revenue of about $4.06 billion. Shares of Micron were down 0.4 percent in extended trade after closing down 1.85 percent at $31.26 on Nasdaq.
(Reporting by Noel Randewich; Editing by Lisa Shumaker, Bernard Orr)