Micron Technology Inc.‘s stock jumped almost 6% in after-hours trading today after the memory chipmaker reporting third-quarter financial results that beat Wall Street’s expectations.

The company also posted guidance for its fiscal fourth quarter that came in well ahead of analysts’ estimates.

For the third quarter, Micron reported a profit before certain costs such as stock compensation of 82 cents per share on revenue of $5.44 billion, up from $4.79 billion a year ago. Wall Street had forecast a 75-cent profit on revenue of $5.27 billion.

The company, which sells dynamic random access memory or DRAM chips used in PCs and servers, and NAND flash memory chips used in smaller devices, had already told investors it would outperform its original expectations in May. Back then, it said it was benefiting from coronavirus-related shutdowns that have seen thousands of people across the world work from home. It said at the time it had seen massive demand for notebooks that can support work from home and virtual learning, as well as its data center services.

That demand isn’t going away either. For the fourth quarter, Micron is forecasting a profit of between 95 cents and $1.15 per share on revenue of $5.75 billion to $6.25 billion, which would be a huge jump from the $4.87 billion in revenue it reported a year ago. Wall Street analysts had earlier forecast a fourth-quarter profit of 79 cents per share on revenue of $5.46 billion.

“Micron’s earnings are a great testament that when a hi-tech company does things right, the results will follow, even when a global pandemic hits,” said Constellation Research Inc. analyst Holger Mueller.

Micron’s stock rose almost 6% in extended trading.

“As we look ahead at the second half, of course, you know, given the total COVID environment and uncertainties around COVID around the globe, we basically have limited visibility,” Micron Chief Executive Sanjay Mehrotra (pictured) told analysts on a conference call. “Yet, we do believe that cloud demand in the second half of the calendar year will continue to be healthy for us.”

Indeed, Micron executives said the company sold double the usual amount of flash memory storage to cloud customers. It also saw strong growth in cloud DRAM sales due to customers upgrading their data center servers.

“There’s a tremendous demand for both PCs and hyperscalers that’s ironically driven by COVID-19, and Micron is taking advantage of this,” said Patrick Moorhead of Moor Insight & Strategy.

The company’s other businesses are likely to be healthy going forward too. During the call, executives said the next generation of smartphones and games consoles were two factors expected to drive its growth. For example, the new breed of 5G-capable smartphones will have around twice as much DRAM as existing 4G models. And the upcoming video games consoles from Microsoft Corp. and Sony Corp. will also include double the amount of DRAM, Micron Chief Business Officer Sumit Sadana said in an interview with Barron’s.

The only blot on Micron’s business was sales related to the automotive sector, which fell due to supply chain disruptions.

Analyst Charles King of Pund-IT Inc. told SiliconANGLE that Micron is an excellent example of a company that blends technical excellence with market savvy, and that its latest financial results are proof of this.

“The company has developed a significant number of innovative technologies, both alone and with strategic allies including Intel,” King said. “It has succeeded in taking those innovations into broader markets. For example, it was the first vendor to deliver a 1-terabyte capacity solid-state drive, and its 3.84-terabyte Micron 5210 Ion has been recognized as the cheapest large capacity SSD in the world. Those efforts have led Micron into an enviable position in a range of memory and storage markets, where demand has stayed steady despite Covid-19’s devastation.”

During the quarter, Micron said it repurchased 929,000 shares for $40 million, ending the three-month period with $2.6 billion in net cash.

Photo: SiliconANGLE