Earnings of chipmaker Micron Technology Inc. (NASDAQ: MU) declined in the second quarter of 2020, continuing the recent trend. The bottom-line was affected by a dip in revenues amid the persistent slowdown in the demand for memory chips.
Towards the end of the quarter, the business was negatively impacted by disruptions caused by the covid-19 outbreak, which is expected to weigh on performance in the coming months.
The results, meanwhile, topped the Street view and the company’s stock gained immediately after the announcement on Wednesday ravening. The market was also encouraged by the better-than -expected third-quarter guidance.
Earnings, adjusted for special items, dropped to $0.45 per share from $1.71 per share in the second quarter of 2019. Unadjusted net income was $405 million or $0.36 per share, compared to $1.6 billion or $1.41 per share last year. Earnings, however, came in above analysts’ forecast.
Dragging down the bottom-line, revenues dropped 18% annually to $4.8 billion during the three-month period, but far exceeded the market’s prediction. All the four business segments registered double-digit fall in revenues during the quarter.
“Micron delivered solid second quarter results and revenue at the high end of the guidance range, despite the unfolding COVID-19 pandemic. I am grateful to our team for the excellent business execution we have achieved during this unprecedented situation,” said CEO Sanjay Mehrotra.
In the quarter ending May 2020, which will be period of great uncertainty due to the coronavirus crisis, adjusted earnings are expected to come in at $0.55 per share, plus or minus $0.15. Unadjusted profit is expected to be $0.41 per share, plus or minus $0.15. The management is currently looking for third-quarter revenues in the range of $4.6 billion to $5.2 billion.
Micron’s stock has dropped 21% since the beginning of the year and 16% in the past one month. The stock closed Wednesday’s regular trading lower, but bounced back during the after-hours session.
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