Micron (MU 29.03, +2.56) has spiked 9.7% after beating quarterly expectations and guiding ahead of market estimates.
The chipmaker reported above-consensus second quarter earnings of $0.90 per share on a 58.4% year-over-year surge in revenue to $4.65 billion, which matched expectations.
Average DRAM selling prices jumped 21.0% while trade NAND sales volume grew 18.0%. Gross margin surged to 38.5% from 26.0%.
Micron has continued expanding its footprint in the DRAM arena, acquiring the remaining 67.0% interest in Inotera Memories in early December. This followed the company's acquisition of Elpida in the middle of 2013. The increased control over the DRAM market has expanded Micron's pricing power in recent quarters.
The company noted that it is still in the midst of executing its cost reduction plan, but those efforts have been masked by strong DRAM and NAND sales. Micron CEO noted that the industry supply of DRAM and NAND was limited during the second quarter. Accordingly, Western Digital (WDC 80.31, +4.12), who acquired SanDisk in May 2016, has enjoyed a 5.4% spike due to expectations that the company will also benefit from a tighter supply of NAND. Seagate (STX 46.33, +1.20) also trades in the green, but holds a slimmer gain (+2.7%) since the company does not have nearly as big of a footprint in the NAND market as Micron or Western Digital.
Micron expects the good times to continue, evidenced by guidance that is well ahead of market expectations. The company expects to generate third quarter earnings between $1.43 and $1.57 per share on revenue between $5.20 billion and $5.60 billion.