Micron Soars Most in Five Years on Optimistic Sales Outlook

Micron Soars Most in Five Years on Optimistic Sales Outlook
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Micron shares jumped the most in five years after the largest U.S. maker of memory chips predicted sales that exceeded some analysts’ estimates as demand for phone and computer parts is beginning to outstrip supplies, according to Bloomberg.

Micron and other memory-chip makers are benefiting from their restraint. While not flooded by an increase in orders for personal computer and mobile phone parts, they’ve limited their spending on new production facilities, balancing supply and demand and keeping prices stable.

In the current quarter, revenue will be as much as $4.7 billion, Micron said, outpacing the average analyst forecast of $4.1 billion. Profit, excluding certain items, will be 58 cents to 68 cents a share, the company said, well ahead of analysts’ average prediction of 46 cents. The shares surged as much as 14 percent to $23.49 Thursday, the biggest intraday gain since December 2011.

Chief Executive Officer Mark Durcan said Micron sees new areas of demand for memory chips, such as automotive and storage in data centers, continuing to drive increasing orders. Unlike in the past, when the market was split among more than 10 suppliers, the remaining three major providers of memory are less likely to suddenly increase spending on production in search of market share, he said in an interview.

Micron, which has grown through a string of acquisitions, is making progress at integrating those acquired facilities into its network of factories and is improving production and profitability, he said. “I think it’s going to be a pretty benign environment,“ he said. “There’s very robust overall demand in the market for memory.“