Memory-chip maker Micron Technology (NASDAQ:MU) reported earnings on Wednesday evening, covering the second quarter of fiscal year 2020. Ths company is certainly feeling the effects of the novel coronavirus crisis, but the quarter was actually business as usual for the most part.

Micron Technology's second-quarter results by the numbers

Metric

Q2 2020

Q2 2019

Change

Analyst Consensus

Revenue

$4.80 billion

$5.84 billion

(18%)

$4.68 billion

GAAP net income

$405 million

$491 million

(18%)

N/A

Adjusted earnings per share (diluted)

$0.45

$1.71

(74%)

$0.37

Data source: Micron Technology. GAAP = generally accepted accounting principles.

Micron eclipsed Wall Street's estimates by a comfortable margin. Those estimates were also modeled tightly around the midpoints of management's official guidance ranges, so Micron fared equally well when measured against its second-quarter guidance targets.

These results were achieved even though the COVID-19 crisis started to develop near the middle of Micron's second quarter. The company is taking strict measures to limit the spread of the disease and to keep its operations running as smoothly as possible. For example, any Micron employee who travels by air or sea must then work from home for the next 14 days, and the company is stocking up on raw materials in order to avoid supply chain disruptions. Even so, two employees have tested positive for the novel coronavirus so far, and the Malaysian government briefly shut down Micron's chip assembly and testing facilities in Penang and Muar. Both sites are back in operation, albeit in a limited capacity.

So the coronavirus is directly affecting Micron's operations today and that negative effect is likely to increase over the next few months. Furthermore, Micron's largest customers aren't exactly running up to the order window as the end-user demand for smartphones and new cars is running low in every market.

A bearded technician wearing goggles holds up a semiconductor chip to take a closer look at it.

Image source: Getty Images.

The virus cloud has a silver lining

But it's not the end of Micron's world. Management sees enough customer demand and manufacturing capacity to fuel third-quarter earnings near $0.55 per share on revenues in the neighborhood of $4.9 billion. Both of these figures sit just above the current analyst views. You see, people working and playing from home in the wake of the novel coronavirus are increasing the need for robust data centers serving up a variety of cloud-based entertainment and productivity services.

"Data center demand in all regions looks strong and is leading to supply shortages," said Micron CEO Sanjay Mehrotra on the second-quarter earnings call. "We are also encouraged to see manufacturers in China increasingly returning to full production, and we have recently started to see China smartphone manufacturing volumes recover."

Mehrotra expects a global economic rebound to start once the coronavirus has been contained. Micron expects a positive economic trend in the second half of calendar year 2020, with an extended rebound spilling over into the next year. But a lot of these details are unguessable in this early stage, leaving Micron and other businesses watching a worldwide patchwork of containment efforts and economic stimulus packages taking shape.

In the meantime, Micron is redirecting some of its smartphone memory manufacturing lines to make more products aimed at the data center instead. Beyond the increased demand for remote services due to coronavirus lockdowns, the company is tapping into explosive growth in fields such as artificial intelligence, the Internet of Things, and the unstoppable rise of solid-state drives (SSD).

What's next for Micron?

The next few quarters will be rocky indeed, and Micron will surely run into as-yet unforeseen difficulties from the COVID-19 pandemic. But the company is in relatively good shape today and the management team appears primed to tackle whatever comes next with a flexible attitude. And the coronavirus caught Micron in the middle of a cyclical upswing, slowing down the upward business trajectory without necessarily breaking it.

It's probably better to think of Micron as a traditional value stock than an exciting high-growth ticker at the moment. Either way, I'm perfectly comfortable with holding on to my Micron shares and might even pick up some more before the virus crisis is over.