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Micron sees memory chip recovery coming later in year, shares rise
March 21, 2019 12:08 am|Comments (0)

(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

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Oracle sees strong third quarter on cloud strength, share rise
December 18, 2018 12:01 am|Comments (0)

(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

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Broadcom sees fourth-quarter boost from data center demand, iPhone launch
September 7, 2018 12:00 am|Comments (0)

(Reuters) – Broadcom Inc (AVGO.O) on Thursday forecast current-quarter revenue largely above estimates on higher demand for components that power data centers, while the launch of Apple Inc’s new iPhones is expected to bolster its wireless business.

A sign to the campus offices of chip maker Broadcom Ltd is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake/File Photo

Shares of Broadcom rose 4 percent to $ 224.90 in extended trading after the chipmaker also reported third-quarter profit that topped analysts’ estimates.

Revenue from enterprise storage business jumped 70 percent in the reported quarter as the acquisition of Brocade helped drive sales gains at the unit.

Its wireless business, which makes chips for Wi-Fi, Bluetooth, and GPS connectivity, reported flat revenue, while its wired infrastructure unit, which makes components used in telecommunication networks, posted a 4 percent rise from a year earlier.

“More than half our consolidated revenue … is benefiting from strong cloud and enterprise data center spending,” Chief Executive Officer Hock Tan said on a post-earnings call with analysts.

“This, coupled with a seasonal uptick in wireless, will drive our forecast revenue in the fourth quarter.”

The company expects a ramp at its North American customer – which analysts identified as Apple – to drive a 25 percent rise in wireless revenue from the previous quarter, although it may be down in single-digit percentage compared with a year earlier.

Apple (AAPL.O) is set to unveil its new iPhones next week.

Tan, who has transformed Broadcom into a $ 100 billion behemoth through a series of acquisitions, surprised Wall Street in July with his move to acquire software maker CA Technologies for $ 19 billion.

Explaining his rationale behind the CA acquisition, Tan said he planned to target the company’s enterprise customers with Broadcom’s offerings including server and storage connectivity products.

The CA deal comes after U.S. President Donald Trump blocked Broadcom’s $ 117 billion offer to buy Qualcomm Inc (QCOM.O) on national security grounds.

Broadcom forecast current-quarter revenue of about $ 5.40 billion, plus or minus $ 75 million. Analysts on average were expecting revenue of $ 5.35 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to common stock rose to $ 1.2 billion, or $ 2.71 per share, in the quarter ended Aug. 5 from $ 481 million, or $ 1.14 per share, a year earlier.

Excluding items, the company earned $ 4.98 per share.

Net revenue rose to $ 5.06 billion from $ 4.46 billion.

Analysts on average were expecting earnings of $ 4.83 per share on revenue of $ 5.07 billion.

Reporting by Sonam Rai and Sayanti Chakraborty in Bengaluru; Editing by Anil D’Silva

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Apple sees 'strong demand' for replacement iPhone batteries: letter
February 6, 2018 6:02 pm|Comments (0)

WASHINGTON/SAN FRANCISCO (Reuters) – Apple Inc (AAPL.O) has seen “strong demand” for replacement iPhone batteries and may offer rebates for consumers who paid full price for new batteries, the company said in a Feb. 2 letter to U.S. lawmakers made public on Tuesday.

Apple confirmed in December that software to deal with aging batteries in iPhone 6, iPhone 6s and iPhone SE models could slow down performance. The company apologized and lowered the price of battery replacements for affected models from $ 79 to $ 29.

In the letter released Tuesday, amid nagging allegations that it slowed down phones with older batteries as a way to push people into buying new phones, the company said it was considering issuing rebates to consumers who paid full price for replacement batteries.

The letter, released by the U.S. Senate Commerce Committee, also said Apple provided a phone-slowing software update in January 2017 but did not disclose it until a month later.

In the letter, Apple said it had known about battery problems caused by a manufacturing defect as early as fall 2016.

Senator John Thune, a Republican who chairs the committee, said in a statement that “consumers rely on clear and transparent disclosures from manufacturers to understand why their device may experience performance changes.”

Thune said that in discussions with the committee “Apple has acknowledged that its initial disclosures came up short. Apple has also promised the committee some follow-up information, including an answer about additional steps it may take to address customers who purchased a new battery at full price.”

Apple did not immediately comment on Thune’s statement.

Last week, the U.S. Department of Justice and the Securities and Exchange Commission said they were investigating whether Apple violated securities laws concerning its disclosures that it slowed older iPhones with flagging batteries, Bloomberg reported.

In a statement last week, Apple said it had “received questions from some government agencies” and was duly responding to them. The company had “never, and would never, do anything to intentionally shorten the life of any Apple product, or degrade the user experience to drive customer upgrades,” the statement said.

Consumers so far have filed some 50 proposed class action lawsuits over Apple’s latest iPhone software update, which they allege caused unexpected shutdowns and hampered the performance of iPhone models of the SE, 6 and 7 lines.

Government agencies in countries ranging from Brazil to France and Italy to South Korea are also investigating Apple following complaints.

Reporting by David Shepardson in Washington and Stephen Nellis in San Francisco, Editing by Franklin Paul and Tom Brown

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