Micron Technology Inc (NASDAQ:MU), the largest US maker of memory chips, stock rose 6.14% (As on March 29, 11:19:15 AM UTC-4, Source: Google Finance) after the company gave a better forecast for the current quarter than some analysts had feared, sparking hope that the worst of a brutal industry slump may be over. Sales will be as much as $3.9 billion in the fiscal third quarter, the company said in a statement Tuesday. That compares with an average of analysts’ estimates of $3.75 billion. The company also announced an increase in job cuts. The company is projecting a loss of about $1.58 a share in the current period, which includes a 45-cent impact associated with $500 million in inventory writedowns. Analysts had estimated a loss of 84 cents a share.
For 2023, the company expects that demand will grow faster than supply. Micron projects a transition to sequential revenue growth, saying that inventory has peaked and end markets such as smartphones and personal computers are contracting less severely than feared. Micron’s data center unit bottomed in the second fiscal quarter.
MU in the second quarter of FY 23 has reported the adjusted loss per share of $1.91, missing the analysts’ estimates for the adjusted loss per share of 63 cents. The company had reported 53 percent decline in the adjusted revenue to $3.69 billion in the second quarter of FY 23, missing the analysts’ estimates for revenue of $3.75 billion. Showing the impact of a collapse in orders, the company is on course to lose more than $3 billion in 2023, its worst annual deficit since it first went public in 1984. Investments in capital expenditures, net were $2.16 billion for the second quarter of 2023, which resulted in adjusted free cash flows of negative $1.81 billion. Operating cash flow of $343 million versus $943 million for the prior quarter and $3.63 billion for the same period last year. Micron ended the second quarter of 2023 with cash, marketable investments, and restricted cash of $12.12 billion. Inventory write-downs was of $1.43 billion, impact of $1.34 per diluted share. Customer inventories are getting better, and the company expects gradual improvements to the industry’s supply-demand balance.
Additionally, Micron’s Board of Directors has declared a quarterly dividend of $0.115 per share, payable in cash on April 25, 2023, to shareholders of record as of the close of business on April 10, 2023.