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Micron Technology’s (MU - Free Report) stock surged 3.9% in Tuesday’s extended trading session after the memory chip maker reported better-than-expected second-quarter fiscal 2022 results and provided a strong third-quarter guidance.
Micron’s fiscal second-quarter non-GAAP earnings per share (EPS) of $2.14 beat the Zacks Consensus Estimate of $1.95. In addition, non-GAAP earnings registered year-over-year growth of a whopping 118%. Quarterly revenues of $7.79 billion outpaced the consensus mark of $7.51 billion and increased about 25% from the year-ago quarter’s $6.24 billion.
Q2 Revenue Details
Dynamic random access memory revenues of $5.72 billion, accounting for 73% of the total revenues in the fiscal second quarter, jumped 29% year over year and 2% sequentially. Bit shipments increased in the high-single-digit percentage range sequentially, while the average selling price (ASP) decreased in the mid-single-digit percentage range on a quarter-over-quarter basis.
Micron Technology, Inc. Price, Consensus and EPS Surprise
NAND revenues of $1.96 billion, representing 25% of the total top line, were up 19% on a year-over-year basis and increased 4% quarter over quarter. While NAND ASP increased in the mid-single-digit percentage band, bit shipments remained flat sequentially.
Segment-wise, revenues of $3.46 billion from the computing and networking business unit climbed 31% from the year-ago quarter and 2% sequentially. MU noted that revenues were mainly driven by the strong performance across the data center and graphics markets. Moreover, an improvement in client revenues led to the segment’s strong performance.
Revenues of $1.91 billion from the Mobile Business Unit climbed 4% on a year-over-year basis but declined 2% sequentially. The company noted that its Mobile Business Unit division continued to perform well, driven by its leadership in providing managed NAND and multi-chip packages and strong relationships with all smartphone makers.
Embedded Business Unit’s revenues logged in $1.3 billion, up 37% from the year-ago period and 5% from the previous quarter. The year-over-year growth was primarily aided by strong execution and solid demand across the automotive and industrial markets.
Revenues from the Storage Business Unit, comprising solid-state drive (“SSD”) NAND components, totaled $1.2 billion, up 38% year over year and 2% sequentially. This year-over-year growth was mainly supported by robust SSD demand from data center customers.
Margins
Micron’s non-GAAP gross profit of $3.72 billion surged 81% year over year and 3% sequentially. Non-GAAP gross margin of 48% reflects a strong improvement from the year-ago quarter’s 33% and 47% in the first quarter of fiscal 2022. The improvement in the gross margin reflects the benefits from a favorable product portfolio mix as MU ramped up several high-value solutions along with reductions in manufacturing costs.
Micron’s non-GAAP operating income of $2.75 billion soared 119% year over year and 0.9% sequentially. Non-GAAP operating margin improved to 35% from the year-earlier quarter’s 20%, primarily on a higher gross margin, partially offset by higher operating expenses as a percentage of revenues. Non-GAAP operating margin remained flat on a quarter-over-quarter basis.
Non-GAAP operating expenses came in at $974 million compared with the previous quarter’s $891 million and the year-ago quarter’s $797 million. As a percentage of revenues, operating expenses for the fiscal second quarter came in at 12.5% compared with the previous quarter’s 11.6% and the year-ago quarter’s 12.8%.
Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $11.9 billion compared with $11.5 billion recorded at the end of the prior quarter. Furthermore, MU ended the quarter with total liquidity of $14.4 billion compared with $14 billion witnessed at the end of the first quarter of fiscal 2022.
Micron’s long-term debt as of Mar 2, 2022 was $6.90 billion compared with $6.69 billion witnessed at the end of the first quarter.
The company generated operating cash flow of $3.6 billion during the fiscal second quarter and free cash flow of $1.03 billion. It repurchased stocks worth $408 million and paid $112 million in dividends.
In the first half of fiscal 2022, Micron generated operating and free cash flows of $7.57 billion and $1.7 billion, respectively. During the period, it repurchased stocks worth $667 million and paid $224 million in dividends.
Guidance
Micron provided strong third-quarter fiscal 2022 guidance. The company anticipates revenues of $8.7 billion (+/-$200 million) for the fiscal third quarter, higher than the Zacks Consensus Estimate of $8.05 billion.
For the fiscal third quarter, MU projects non-GAAP gross margin of 48% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated at $1.05 billion (+/-$25 million).
Adjusted EPS is anticipated at $2.46 (+/-10 cents). The consensus mark is pegged at $2.22 per share.
The Zacks Consensus Estimate for Jabil’s third-quarter fiscal 2022 earnings has been revised upward to $1.62 per share from $1.46 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 67 cents to $7.25 per share in the past 30 days.
Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 13.5%. Shares of JBL have rallied 18.6% over the past year.
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by 10.2% to $8.64 per share over the past 30 days. For fiscal 2022, earnings estimates have moved upward by 7.1% to $35.49 per share over the past 30 days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 38.3% in the trailing 12 months.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by five cents to $1.43 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 30 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has rallied 46.5% over the past year.
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Micron (MU) Gains 4% on Q2 Earnings Beat, Strong Q3 Guidance
Micron Technology’s (MU - Free Report) stock surged 3.9% in Tuesday’s extended trading session after the memory chip maker reported better-than-expected second-quarter fiscal 2022 results and provided a strong third-quarter guidance.
Micron’s fiscal second-quarter non-GAAP earnings per share (EPS) of $2.14 beat the Zacks Consensus Estimate of $1.95. In addition, non-GAAP earnings registered year-over-year growth of a whopping 118%. Quarterly revenues of $7.79 billion outpaced the consensus mark of $7.51 billion and increased about 25% from the year-ago quarter’s $6.24 billion.
Q2 Revenue Details
Dynamic random access memory revenues of $5.72 billion, accounting for 73% of the total revenues in the fiscal second quarter, jumped 29% year over year and 2% sequentially. Bit shipments increased in the high-single-digit percentage range sequentially, while the average selling price (ASP) decreased in the mid-single-digit percentage range on a quarter-over-quarter basis.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
NAND revenues of $1.96 billion, representing 25% of the total top line, were up 19% on a year-over-year basis and increased 4% quarter over quarter. While NAND ASP increased in the mid-single-digit percentage band, bit shipments remained flat sequentially.
Segment-wise, revenues of $3.46 billion from the computing and networking business unit climbed 31% from the year-ago quarter and 2% sequentially. MU noted that revenues were mainly driven by the strong performance across the data center and graphics markets. Moreover, an improvement in client revenues led to the segment’s strong performance.
Revenues of $1.91 billion from the Mobile Business Unit climbed 4% on a year-over-year basis but declined 2% sequentially. The company noted that its Mobile Business Unit division continued to perform well, driven by its leadership in providing managed NAND and multi-chip packages and strong relationships with all smartphone makers.
Embedded Business Unit’s revenues logged in $1.3 billion, up 37% from the year-ago period and 5% from the previous quarter. The year-over-year growth was primarily aided by strong execution and solid demand across the automotive and industrial markets.
Revenues from the Storage Business Unit, comprising solid-state drive (“SSD”) NAND components, totaled $1.2 billion, up 38% year over year and 2% sequentially. This year-over-year growth was mainly supported by robust SSD demand from data center customers.
Margins
Micron’s non-GAAP gross profit of $3.72 billion surged 81% year over year and 3% sequentially. Non-GAAP gross margin of 48% reflects a strong improvement from the year-ago quarter’s 33% and 47% in the first quarter of fiscal 2022. The improvement in the gross margin reflects the benefits from a favorable product portfolio mix as MU ramped up several high-value solutions along with reductions in manufacturing costs.
Micron’s non-GAAP operating income of $2.75 billion soared 119% year over year and 0.9% sequentially. Non-GAAP operating margin improved to 35% from the year-earlier quarter’s 20%, primarily on a higher gross margin, partially offset by higher operating expenses as a percentage of revenues. Non-GAAP operating margin remained flat on a quarter-over-quarter basis.
Non-GAAP operating expenses came in at $974 million compared with the previous quarter’s $891 million and the year-ago quarter’s $797 million. As a percentage of revenues, operating expenses for the fiscal second quarter came in at 12.5% compared with the previous quarter’s 11.6% and the year-ago quarter’s 12.8%.
Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $11.9 billion compared with $11.5 billion recorded at the end of the prior quarter. Furthermore, MU ended the quarter with total liquidity of $14.4 billion compared with $14 billion witnessed at the end of the first quarter of fiscal 2022.
Micron’s long-term debt as of Mar 2, 2022 was $6.90 billion compared with $6.69 billion witnessed at the end of the first quarter.
The company generated operating cash flow of $3.6 billion during the fiscal second quarter and free cash flow of $1.03 billion. It repurchased stocks worth $408 million and paid $112 million in dividends.
In the first half of fiscal 2022, Micron generated operating and free cash flows of $7.57 billion and $1.7 billion, respectively. During the period, it repurchased stocks worth $667 million and paid $224 million in dividends.
Guidance
Micron provided strong third-quarter fiscal 2022 guidance. The company anticipates revenues of $8.7 billion (+/-$200 million) for the fiscal third quarter, higher than the Zacks Consensus Estimate of $8.05 billion.
For the fiscal third quarter, MU projects non-GAAP gross margin of 48% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated at $1.05 billion (+/-$25 million).
Adjusted EPS is anticipated at $2.46 (+/-10 cents). The consensus mark is pegged at $2.22 per share.
Zacks Rank & Other Stocks to Consider
Currently, Micron carries a Zacks Rank #2 (Buy).
Some other similar-ranked stocks from the broader technology sector include Jabil (JBL - Free Report) , Broadcom (AVGO - Free Report) and Apple (AAPL - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Jabil’s third-quarter fiscal 2022 earnings has been revised upward to $1.62 per share from $1.46 30 days ago. For fiscal 2022, earnings estimates have been revised upward by 67 cents to $7.25 per share in the past 30 days.
Jabil’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 13.5%. Shares of JBL have rallied 18.6% over the past year.
The Zacks Consensus Estimate for Broadcom’s second-quarter fiscal 2022 earnings has been revised upward by 10.2% to $8.64 per share over the past 30 days. For fiscal 2022, earnings estimates have moved upward by 7.1% to $35.49 per share over the past 30 days.
Broadcom’s earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 1.9%. Shares of AVGO have rallied 38.3% in the trailing 12 months.
The Zacks Consensus Estimate for Apple’s second-quarter fiscal 2022 earnings has been revised upward by five cents to $1.43 per share over the past 60 days. For fiscal 2022, earnings estimates have moved upward by a penny to $6.16 per share in the past 30 days.
Apple’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 20.3%. AAPL stock has rallied 46.5% over the past year.