Micron Technology Inc. expects current-quarter revenue to increase and that the shift to work-from-home globally due to the coronavirus outbreak is fueling demand for notebooks and data center services.
Notebooks that support work-from-home and virtual learning are increasingly in demand, Chief Executive Officer Sanjay Mehrotra said on a post-earnings call with analysts.
The jump in remote work is also powering a surge in demand for data center services.
Mehrotra said data center business in China was boosted by increased gaming, e-commerce and remote-work activities as the country locked down many cities and regions to combat the outbreak.
The company is moving supply from smartphone to service the strength in data center markets, Mehrotra said, adding the demand could lead to supply shortages.
Micron said two of its factories in Malaysia were briefly shut down and is now running production on a limited basis, in compliance with the country’s orders.
Revenue will be $4.6 billion to $5.2 billion in the fiscal third quarter, which ends in May, Micron said Wednesday in a statement. Adjusted earnings will be 55 cents a share, plus or minus 15 cents.
Net income in the period ended Feb. 27 fell to $405 million, or 36 cents a share, from $1.62 billion, or $1.42 a share, a year earlier. Revenue declined 18% to $4.8 billion.
“Micron delivered solid second quarter results and revenue at the high end of the guidance range, despite the unfolding COVID-19 pandemic,” said Sanjay Mehrotra. “I am grateful to our team for the excellent business execution we have achieved during this unprecedented situation. Their resilience, together with Micron’s technology leadership, stronger product portfolio, and healthy balance sheet, give us confidence that we will emerge from this challenging time well-positioned to capture the robust long-term demand opportunities for memory and storage.”
Meanwhile, a group representing major semiconductor companies including Intel and Micron said on Wednesday it was working with federal officials to make clear to state and local officials overseeing lockdowns that chip companies are essential businesses that should continue operations.
Micron also announced plans to commit $35 million to help those disproportionately affected by COVID-19. The company will launch a new Micron Foundation $10 million relief fund, increase employee gift matching, and introduce financial assistance for team members through grants. Micron will also provide in-kind support by accelerating payments to small business suppliers, and donating facilities and supplies for emergency medical response.
“Micron is prioritizing the health and safety of our team members and partners, and the well-being of the communities in which we operate,” said Sanjay Mehrotra. “As the scale of the COVID-19 pandemic becomes more apparent, we are immediately accelerating our efforts to provide funding, resources and support to those most impacted by this health crisis.”
The new $10 million Micron Foundation COVID-19 Relief Fund will go toward global initiatives focused on economic recovery, addressing both current and future community needs. Funding will help support a range of charities and initiatives, from food banks and school meal programs to health facilities and online learning resources for students.
In addition, Micron has implemented a 2-to-1 company match for all designated COVID-19 donations to our Micron Gives charitable program to double the impact of these contributions. As part of its plans to offer greater community resources, Micron will provide up to 300,000 protective masks to local health officials and make Micron facilities available as additional capacity for overflow patients if hospitals become overwhelmed.
Micron will also make a one-time COVID-19 assistance payment to its employees, offering $1,000 to all U.S. team members who earn less than $100,000 per year, and appropriately scaled amounts to those eligible in the other countries where we operate. This initiative will reach over 68% of Micron’s employee base worldwide. Additionally, Micron will invest in an employee-supported fund for those facing financial hardship. This fund will provide grants of up to $5,000 to individual team members based on need.
Micron is also accelerating payments to its more than 500 small business vendors to ease near-term cash flow challenges that many are facing around the world.