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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Micron Technology, Inc.    MU


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Micron yet to regain license to sell to Huawei, pressuring sales

09/29/2020 | 10:08pm EST
Micron Technology's solid-state drive for data center customers is presented at a product launch event in San Francisco

Micron Technology Inc has not yet obtained new licenses needed to sell its memory chips to China's Huawei Technologies Co Ltd, which will cut its sales over the next two quarters, company executives said on Tuesday.

Boise, Idaho-based Micron, one of the world's biggest makers of DRAM chips, said it had previously obtained licenses from the U.S. government to sell chips for mobile phones and servers from its factories outside the United States to Huawei, which has been the target of U.S. restrictions on chip sales since last year.

Huawei accounted for about $600 million of Micron's $6.06 billion in sales for the fiscal fourth quarter ended Sept. 3, or just under 10%.

But a new round of restrictions that took effect in September barred sales of any chip made using U.S. tools or software, which rendered Micron's earlier licenses invalid and halted sales on Sept. 14.

"The manufacturing equipment in those fabs are obviously from U.S.-based companies," Micron's chief business officer, Sumit Sadana, told Reuters in an interview. These included Applied Materials Inc and Lam Research Corp.

Sadana said Micron has applied to the U.S. government for new licenses to sell to Huawei but does not yet have them and does not know if or when they will be approved. The company is shifting to selling to other smart phone customers but the shift will take until Micron's fiscal second quarter to complete.

"As soon as we get the license, we would work with Huawei to determine how we can resurrect the business," Sadana said.

Micron shares, which were volatile in extended trading, were down 2% at $49.84 after the company disclosed the Huawei hit.

Revenue jumped over 24% to $6.06 billion in the fiscal fourth quarter, beating analysts' estimate of $5.89 billion, according to IBES data from Refinitiv.

The company expects fiscal first-quarter sales to be $5.2 billion, plus or minus $200 million, while analysts on average were expecting $5.31 billion.

Net income attributable to the company rose to $988 million, or 87 cents per share, in the last quarter, from $561 million, or 49 cents per share, a year earlier. (https://bit.ly/2EP3qEo)

Excluding items, Micron earned $1.08 per share, beating analysts' estimates of 99 cents.

By Stephen Nellis and Akanksha Rana

© Reuters 2020
Stocks mentioned in the article
ChangeLast1st jan.
APPLIED MATERIALS, INC. 1.87% 82.66 Delayed Quote.32.93%
LAM RESEARCH CORPORATION 2.18% 456.54 Delayed Quote.56.14%
MICRON TECHNOLOGY, INC. 1.26% 64.23 Delayed Quote.19.43%
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Financials (USD)
Sales 2021 22 929 M - -
Net income 2021 3 116 M - -
Net cash 2021 2 286 M - -
P/E ratio 2021 24,5x
Yield 2021 0,26%
Capitalization 71 502 M 71 502 M -
EV / Sales 2021 3,02x
EV / Sales 2022 2,34x
Nbr of Employees 40 000
Free-Float 93,0%
Duration : Period :
Micron Technology, Inc. Technical Analysis Chart | MarketScreener
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Technical analysis trends MICRON TECHNOLOGY, INC.
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 36
Average target price 62,53 $
Last Close Price 64,23 $
Spread / Highest target 55,7%
Spread / Average Target -2,64%
Spread / Lowest Target -45,5%
EPS Revisions
Sanjay Mehrotra President, Chief Executive Officer & Director
Robert E. Switz Chairman
Manish Bhatia Executive Vice President-Global Operations
David A. Zinsner Chief Financial Officer & Senior Vice President
Scott J. DeBoer Executive Vice President-Technology & Products