Reuters
- US-based chipmaker Micron Technology surged 9% in early morning trading after reporting revenue and earnings that beat Wall Street estimates.
- The company reported earnings per share of $1.05, beating Wall Street expectations of $0.78, and revenue of $4.79 billion, which exceeded the average forecast of $4.68 billion.
- Micron’s business was hurt by the Trump administration export ban on Huawei, a Chinese telecommunications company, imposed earlier this spring.
- The company has since started shipping to Huawei once again, but not at full capacity.
- Watch Micron Technology trade live.
Chip manufacturers in the US are all feeling the impact of the Trump administration’s Huawei ban, but some companies are weathering the storm better than others.
Shares of Idaho-based Micron Technology climbed as much as 9% on Wednesday morning after the chipmaker reported better-than-expected revenue and earnings in the fiscal third quarter of 2019.
Micron reported earnings per share of $1.05, which smashed the consensus expectation of $0.78. The company’s sales hit $4.79 billion, down from $7.8 billion during the same quarter last year, but outpacing Wall Street estimates of $4.68 billion.
Micron was forced to suspend shipments to Chinese telecommunications giant Huawei earlier this spring after the Trump Administration placed a ban doing business with the company. Sanjay Mehrotra, the chief executive officer and president of Micron Technology, said the company was able to starting shipping some of orders to Huawei again after reviewing its shipments and the details of the ban.
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"There is considerable ongoing uncertainties surrounding the Huawei situation, and we are unable to predict the volumes or time periods over which we will be able to ship products to Huawei," Mehrota said during an earnings call yesterday.
The broader semiconductor industry in the US has taken a hit from the Huawei ban. In early June, Broadcom missed revenue expectations and lowered its sales outlook for the year citing geopolitical uncertainties and export restrictions on Huawei.
"The industry remains under significant price pressure however data center inventory reductions are bottoming, price elasticity is leading to a return to bit demand growth, and some shipments to Huawei have resumed." Hans Mosesmann, a semiconductors analyst at Rosenblatt Securities said in a research note on Wednesday.
According to David Zinsner, the senior vice president and chief financial officer of Micron, the company expects to generate between $4.3 billion and $4.7 billion in revenue next quarter
Micron was up 3% year-to-date through Tuesday.
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Source: Business Insider – feedback@businessinsider.com (Daniel Strauss)