Memory chipmaker Micron Technology Inc (NASDAQ:MU) posted fiscal fourth-quarter results and a revenue outlook that impressed Wall Street as signs of stabilization in the personal computer industry supported demand for DRAM chips.
Micron's shares surged over 4 percent in extended trade after the release of its revenue forecast and said it has seen strong demand from personal computer manufacturers. The company has been locking in DRAM prices with its largest customers, Micron president Mark Adams told analysts on a conference call.
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The company also said demand for NAND chips, used in smartphones, solid-state drives and laptops, was in line with current supply growth rates.
Micron said in a statement its revenue jumped 49 percent to $4.23 billion in the fiscal fourth quarter, which ended in August.
For the upcoming fiscal first quarter, Micron said it expects revenue between $4.45 billion and $4.70 billion, helped partly by an extra week in the quarter due to a periodic adjustment of the company's fiscal calendar.
Analysts on average expected revenue of $4.16 billion for the fourth quarter and $4.04 billion for the first quarter, according to Thomson Reuters I/B/E/S.
Micron's stock has surged 44 percent so far this year, helped by optimism about strong and stable prices for memory chips. Investors have also applauded Micron's acquisition of Japanese DRAM maker Elpida Memory, which the U.S. chipmaker acquired in July 2013 in a bid to improve economies of scale.
Boise, Idaho-based Micron believes - and some on Wall Street concur - that recent industry consolidation, including the Elpida deal, is putting an end to the extreme price volatility that in difficult years has left larger companies losing money and driven smaller players out of business.
Micron posted a net profit in the fourth quarter of $1.15 billion, or 96 cents per share, compared with a net profit of $1.71 billion, or 1.51 cents, in the same quarter a year earlier.
Excluding items, Micron earned 82 cents per share in the quarter. Analysts on average forecast fourth-quarter earnings of 81 cents per share.
Micron's gross margin for the quarter was about 32.8 percent, compared to 33.7 percent expected by analysts.
Shares of Micron were 4.23 percent higher in extended trade after closing down 1.61 percent at $31.70 on Nasdaq.
(Reporting by Noel Randewich; editing by G Crosse)