Micron Technology Inc. (MU), the largest U.S. maker of memory chips, reported fiscal first-quarter revenue that topped analysts’ estimates after the acquisition of Elpida Memory Inc. lifted sales of its products.
Revenue in the period that ended Nov. 28 more than doubled to $4.04 billion, the company said in a filing today. Analysts estimated on average sales of $3.72 billion, according to data compiled by Bloomberg.
Chief Executive Officer Mark Durcan is seeking to reshape the industry by limiting supply so that prices don’t drop. Buying Japanese semiconductor maker Elpida for $2 billion in July approximately doubled Micron’s share of the global market for dynamic random-access memory, which provides the main memory in personal computers. DRAM prices increased in the quarter, due in part to a fire at a plant operated by SK Hynix Inc. (000660), the second-largest maker of memory chips, according to Betsy Van Hees, an analyst at Wedbush Securities in San Francisco.
“DRAM prices are going to continue to move higher,” said Van Hees, who has the equivalent of a buy rating on the stock. “It’s a very favorable time for Micron. Micron is benefiting from the unfortunate fire that Hynix experienced in September. Customers have had no other choice but to come to them.”
Micron’s shares, which more than tripled last year, rose as much as 7 percent in extended trading. The stock advanced 5.1 percent to $21.73 at the close in New York. Micron, based in Boise, Idaho, was the best performer in the Philadelphia Semiconductor Index for 2013.
While DRAM provides the main memory in PCs, an increasing amount of supply is being diverted to smartphones and tablets as the devices become more like computers. Memory chipmakers also make Nand flash memory, which provide the storage in mobile gadgets.
First-quarter net income was $358 million, or 30 cents a share, compared with a loss of $275 million, or 27 cents, a year earlier.
Revenue from DRAM products rose 69 percent from the previous period, Micron said today, buoyed by a gain in sales volume caused by the Elpida purchase.
Revenue from Nand products rose 8 percent from the previous quarter as an 11 percent increase in sales volume made up for a “slight” drop in prices, Micron said.
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