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SEOUL (Reuters) – Shares of South Korean chip giants jumped on Thursday after U.S. chipmaker Micron Technology Inc forecast recovery in a memory market saddled with oversupply as device demand sags.
FILE PHOTO: Memory chip parts of U.S. memory chip maker MicronTechnology are pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach
The world’s second-biggest memory chip maker, SK Hynix Inc, saw its shares surge nearly 7 percent by 0330 GMT, while technology giant Samsung Electronics Co Ltd gained 4.3 percent.
Micron said on Wednesday it saw recovery in the memory chip market, after reporting quarterly profit that beat analyst estimates as cost control helped offset falling demand and prices.
“Micron’s projection on growing memory chip demand from data center operators set up a positive outlook for the memory chip industry, helping boost shares of South Korean chipmakers,” said analyst Seo Sang-young at Kiwoom Securities.
Analysts have been wary about prospects of the memory chip market due to lower demand for smartphones and slumping investment from data center companies.
“With its plan to cut production, it seems that Micron is determined to better control oversupply problems in the chip market,” said analyst Park Sung-soon at BNK Securities.
Tech research firm TrendForce in a report on Wednesday said it expects a only a slight decline in NAND flash chip sales in the second quarter as demand recovers from smartphones, computers and servers.
“Although it won’t cause an immediate reversal of the oversupply situation, it will have a positive effect on the market environment,” analyst Ben Yeh at DRAMeXchange, a Trendforce division, said in the report.
Both Samsung Electronics and SK Hynix said in their earnings conference calls in January that they expected sales of memory products to revive in the second half of the year.
Rising chip shares helped lift the broader KOSPI stock price index by 0.3 percent.
Reporting by Heekyong Yang; Editing by Christopher Cushing
(Reuters) – U.S. chipmaker Micron Technology Inc on Wednesday said it sees a recovery in the memory chip market coming and reported a quarterly profit that beat estimates as cost controls helped offset falling demand and prices, sending its shares up nearly 5 percent.
The logo of U.S. memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach
Micron makes NAND storage chips that are used in phones and internet servers as well as DRAM chips that help computer processors communicate with those storage chips.
The company beat revenue expectations for the fiscal second quarter ended Feb. 28. Although it gave a forecast for its fiscal third quarter that was below Wall Street’s expectations, Micron said demand is likely to begin growing again by its fourth quarter.
The results come against the backdrop of a glut in the global semiconductor industry triggered by waning demand for smartphones and spotty purchasing patterns by cloud-computing vendors, which hurt chipmakers such as Intel Corp earlier this year.
Meantime, Micron trimmed its spending plans and said it had idled some factory lines to bring its chip output in line with lower demand, helping keep profits flowing and a share buyback plan on track.
For its fiscal second quarter, Micron generated nearly $ 1 billion in free cash flow and a profit of $ 1.71 per share, excluding items. That was down from $ 2.82 a year earlier but above Wall Street expectations of $ 1.67, according to IBES data from Refinitiv.
“Certainly Micron has not been in a situation before where it’s been able to deliver such healthy profitability and cash flow in an adverse industry environment,” Chief Executive Sanjay Mehrotra said in an interview with Reuters.
Kinngai Chan, an analyst with Summit Insights Group, said investors were focusing on the outlook for a recovery in the second half of the calendar year, with the fiscal third quarter forecast representing “the bottom for Micron’s near-term sales and gross margin.”
The Boise, Idaho-based company said on Wednesday it expects revenue between $ 4.6 billion and $ 5 billion for its fiscal third quarter, falling short of analyst expectations of $ 5.3 billion according to IBES data from Refinitiv. The company cut planned capital expenditures for the 2019 fiscal year to $ 9 billion, Micron executives said, down from a previous forecast of between $ 9 billion and $ 9.5 billion.
Revenue fell to $ 5.84 billion from $ 7.35 billion, beating expectations of $ 5.3 billion.
The company said it bought back 21 million shares of its common stock for $ 702 million during the quarter as part of its $ 10 billion share buyback program, leaving a net cash position of $ 2.99 billion.
Reporting by Sayanti Chakraborty in Bengaluru and Stephen Nellis in San Francisco; editing by Sriraj Kalluvila and Leslie Adler
(Reuters) – Oracle Corp on Monday forecast current-quarter profit above estimates after growth in its cloud services and license support unit helped the business software maker surpass Wall Street expectations for the second quarter.
FILE PHOTO: People gather prior to the start of a keynote speech at the All Things Oracle OpenWorld Summit in San Francisco, California September 24, 2013. REUTERS/Jana Asenbrennerova/File Photo
Shares rose 5 percent, with the company saying that excluding fluctuations in exchange rates, it expected third-quarter adjusted profit to be between 86 cents and 88 cents per share.
Analysts on average were expecting 84 cents, according to IBES data from Refinitiv.
Revenue at its cloud services and license support unit, its biggest, rose 2.7 percent to $ 6.64 billion and beat analysts’ estimate, as more companies shifted to cloud computing from the traditional on-premise database model to cut costs.
Oracle’s in June created a new revenue reporting structure that merged its cloud and software license businesses, which analysts have said gives little insight into the standalone performance of its cloud unit.
Oracle is a late entrant to the rapidly growing cloud-based software business, but has aggressively stepped up its efforts to catch up with rivals such as Workday Inc, Microsoft Corp and Salesforce.com Inc.
“Oracle’s growth in cloud services and license support of just 3 percent appears to be contradicting the strength in the overall cloud market,” said Daniel Morgan, senior portfolio manager of Synovus Trust Co, which hold 152,500 shares in the company.
Last month, Workday reported a 35 percent jump in cloud subscription revenue, while Salesforce’s flagship product Sales Cloud grew 11 percent.
“Oracle is still dragging behind other old line enterprise software players like Microsoft in its transition to becoming a top cloud company,” said Morgan, whose firm also hold shares in Salesforce and Microsoft Corp.
The company’s net income rose to $ 2.33 billion, or 61 cents per share, in the second quarter ended Nov. 30. Excluding items, the company earned 80 cents per share, beating the average analyst estimate of 78 cents.
Total revenue fell marginally to $ 9.56 billion, but brushed past analyst expectation of $ 9.52 billion.
Shares of the company were up at $ 48 in after-market trading.
Reporting by Vibhuti Sharma in Bengaluru; Editing by Arun Koyyur
(Reuters) – Major cryptocurrency exchange Coinbase said on Wednesday it will investigate accusations of insider trading, following a sharp increase in the price of bitcoin cash hours before it announced support for the virtual currency.
Bitcoin cash, a clone of bitcoin, jumped to $ 8,500 on Coinbase’s exchange on Tuesday afternoon, hours before the San Francisco-based exchange launched trading in bitcoin cash.
Trading in bitcoin cash will be suspended until 1200 ET (1700 GMT) Wednesday, a Coinbase status page showed.
Meanwhile, bitcoin, the world’s most popular cryptocurrency, fell more than 10 percent on Wednesday to a one-week low of $ 15,800. Bitcoin has risen some 1,700 percent this year and nearly 80 percent this month alone.
“If we find evidence of any employee or contractor violating our policies — directly or indirectly — I will not hesitate to terminate the employee immediately,” Coinbase Chief Executive Brian Armstrong said in a blog post. (bit.ly/2CMbaA3)
Additionally, Coinbase employees have been restricted from trading in bitcoin cash for several weeks, Coinbase said on Twitter.
Earlier on Tuesday, traders on Twitter alleged that news of Coinbase’s launch of bitcoin cash support had been leaked before the official announcement.
Bitcoin cash was created on Aug. 1 when Hong Kong-based exchange Bitfinex said a minority of bitcoin miners would create a new version of bitcoin to make trading faster and easier.
Reporting by Nikhil Subba and Mekhla Raina in Bengaluru; Editing by Amrutha Gayathri and Sai Sachin Ravikumar
As seen, Alibaba Group Holding Ltd (NYSE:BABA) has quickly grown its cloud computing paying customer base. When compared to the likes of …