Shares of the semiconductor company Micron Technology Inc. were flying higher in late trading today after it delivered strong results in its fiscal fourth quarter and impressed with its outlook.

The company reported earnings before certain costs such as stock compensation of $1.18 per share, coming in ahead of the consensus estimate of $1.11. Revenue for the period jumped 93% from a year earlier, to $7.75 billion, easily beating the analyst forecast of $7.65 billion. In addition, the company logged net income of $887 million, rebounding from a $1.43 billion loss in the year-ago quarter.

The forecast for the current quarter was even more impressive. Micron said it’s projecting revenue of $8.5 billion to $8.9 billion, well ahead of the analyst’s target of $8.3 billion. That number would represent exceptional growth. In the first quarter of fiscal 2024, the company generated revenue of just $4.73 billion.

Micron also projects earnings of $1.74 per share at the midpoint of its range, compared with the Street’s guidance of just $1.52 per share.

With the conclusion of its fourth quarter, Micron also reported its full fiscal 2024 results, saying it generated total revenue of $25.11 billion, up from $15.54 billion in the previous year. All told, its net income for the year came to $1.47 billion.

Within the semiconductor industry, Micron has established itself as a leader in the dynamic random-access memory chip segment. DRAM is widely used in personal computers and servers.

More recently, Micron has made a name for itself as a key supplier of high-bandwidth memory, or essentially higher-capacity DRAM, which is used in artificial intelligence servers. Whereas Nvidia Corp.’s graphics processing units provide the actual processing power for AI systems, Micron’s chips provide the memory and storage capacity those workloads need.

With the AI industry going bananas these days, that explains the turnaround in Micron’s fortunes over the last year, as acknowledged by its Chief Executive Sanjay Mehrotra (pictured).

“Robust AI demand drove a strong ramp of our data center DRAM products and our industry-leading high bandwidth memory,” the CEO said in a statement. “We are entering fiscal 2025 with the best competitive positioning in Micron’s history. We forecast record revenue in fiscal Q1 and a substantial revenue record with significantly improved profitability in fiscal 2025.”

Those last comments were music to the ears of investors, sending Micron’s stock up more than 14% in extended trading, adding to a slight gain of just over 1% during the regular trading session.

Besides selling DRAM products, Micron also makes NAND memory, which is the main component of flash memory drives, which are used in smartphones and USB sticks. That segment of the company’s business is also on the up, with Mehrotra noting it delivered over $1 billion in quarterly sales for the first time.

Micron’s fortunes are often held hostage by a delicate supply-demand balance in the memory chip market, as this is one of the main factors that affects the prices of its chips. On the supply front, Mehrotra said on a call with analysts that the current environment is looking extremely good for the company, with “industry conditions set to help drive the improvement in profitability needed to enable investments required to support future growth.”

Micron finance chief Mark Murphy also spoke on the call, saying that demand for high-bandwidth memory is “creating supply constraints in the marketplace as share bits increase. According to him, that should ensure the supply and demand environment remains healthy throughout the remainder of the calendar year and beyond.

Constellation Research Inc. analyst Holger Mueller said Micron is really on a roll, almost doubling its revenue and showing a stark contrast to its performance one year earlier, when it had an operating loss of close to $1.5 billion.

“It has turned things around completely, with an operating profit of greater than $1.5 billion, fueled by high demand for its high-bandwidth memory products,” Mueller said. “Sanjay Mehrotra deserves kudos for having the fortitude to maintain Micron’s cost base, so all of the extra revenue can be translated into profits.”

The earnings beat and positive outlook were a pleasant surprise for investors, as sentiment around Micron has been less than enthusiastic in recent months. Three months earlier, the company’s stock plunged on a disappointing outlook, and just ahead of today’s earnings report, a Citi analyst issued a note warning investors to expect below-consensus guidance.

Although Micron’s stock had fallen 32% in the last three months, it was still up 12% in the year to date, prior to today’s moves.

Photo: SiliconANGLE