We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Adjusted earnings per share (excluding the impact of one-time items but including stock based compensation expense) of 28 cents came ahead of the Zacks Consensus Estimate of 24 cents. Also, adjusted earnings increased from the year-ago figure of 24 cents per share.
Quarter Details
Micron’s revenues in the quarter not only increased 18.5% on a year-over-year basis to $3.970 billion, but also surpassed the Zacks Consensus Estimate of $3.784 billion. Also, reported revenues increased on a quarter-over-quarter basis (up 23%), primarily due to pricing improvement in the DRAM and NAND sales volume. Also, a 5% increase in DRAM average selling prices (ASP) supported the revenue growth.
DRAM products accounted for 61% of total revenue during the quarter. DRAM revenues increased 18% on a sequential basis. On the other hand, NAND sales volume increased around 26% quarter over quarter.
Coming to the Storage Business Unit (SBU), revenues of $860 million were up 13% sequentially.
Revenues from the Mobile Business Unit (MBU) increased 25% sequentially and accounted for around 30% of total revenue. The increase was primarily due to a continuous ramp in the Chinese market and strong growth in LPDRAM and mobile NAND product lines.
The computing and networking business (CNBU) saw an 18% sequential increase in revenues to $1.47 billion, primarily due to an increase in 20-nanometer shipment growth across all segments coupled with pricing improvement.
Revenues from the embedded business came in at $578 million, up 13% from the last quarter, primarily due to strength in the automotive and consumer segments.
Micron’s gross profit was up 19.1% on a year-over-year basis to $1.01 billion. Gross margin was 25.5% compared with 25.39% a year ago, primarily due to a strong pricing environment and higher revenue base.
Selling, general and administrative (SG&A) expenses decreased 11.2% year over year to $159 million. Research and development (R&D) expenses were $470 million, up 11.6% on a year-over-year basis. Operating expenses, as a percentage of revenues, decreased 200 basis points on a year-over-year basis to 16.4%.
Micron reported operating income of $359 million compared with $232 million reported in the year-ago quarter. Operating margin increased 211 bps year over year to 9%.
The company reported adjusted net income (excluding the impact of one-time items but including stock based compensation expense) of approximately $289 million compared with $253 million reported in the year-ago period.
On a GAAP basis, the company reported net income of $180 million compared with the year-ago reported net income of $206 million.
The company exited fiscal first quarter with cash and short-term investments of $4.17 billion compared with $4.39 billion in the previous quarter. Receivables were $2.45 billion compared with $2.07 billion in the previous quarter. Micron’s long-term debt decreased to $8.49 billion from $9.15 billion in the prior quarter.
During the quarter, the company generated cash of $1.138 billion. Capital expenditure was $1.18 billion in the first quarter of fiscal 2017.
Guidance
For the second quarter of fiscal 2017, Micron expects revenues in a range of $4.35 billion to $4.7 billion. The Zacks Consensus Estimate is pegged at $3.898 billion. The company expects earnings per share in the range of 58 cents to 68 cents. The Zacks Consensus Estimate is pegged at earnings of 35 cents.
Management expects gross margin in a range of 31% to 34% in fiscal second quarter 2017. Operating expenses are expected in a range of $590 million to $640 million and operating income is likely to be within $800 million to $900 million.
Going forward, Micron expects favourable supply and demand dynamics to continue in 2017.
Our Take
Micron reported better-than-expected first-quarter fiscal 2017 results. Both the top and the bottom line increased on a year-over-year basis, primarily due to pricing improvement in DRAM and NAND sales volume. The second quarter guidance was also encouraging.
Going forward, the acquisitions of Elpida and Rexchip (now known as Micron Memory Japan, Inc. and Micron Memory Taiwan Co., Ltd., respectively) will increase Micron’s traction in the memory market.
Micron is positive about the product launches and growing demand, particularly that of SSD products. The company has been constantly innovating in memory technologies, spanning DRAM, NAND and NOR Flash memory solutions, which are widely used in the latest mobile computing devices as well as in consumer, networking and embedded products.
However, Western Digital Corporation (WDC - Free Report) , a key player in the NAND space, could increase competition in the industry.
Nonetheless, Micron has outperformed the Zacks categorized Electronic-Semiconductor industry over the last six months. Share price of Micron gained 46.5% compared with the industry’s gain of 24.4%.
NVIDIA and Applied Materials have a long term-expected EPS growth rate of 10.3% and 13.7%, respectively.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Micron (MU) Tops on Q1 Earnings & Revenues, Guides Strong
Micron Technology Inc. (MU - Free Report) reported better-then-expected first-quarter fiscal 2017 results.
Adjusted earnings per share (excluding the impact of one-time items but including stock based compensation expense) of 28 cents came ahead of the Zacks Consensus Estimate of 24 cents. Also, adjusted earnings increased from the year-ago figure of 24 cents per share.
Quarter Details
Micron’s revenues in the quarter not only increased 18.5% on a year-over-year basis to $3.970 billion, but also surpassed the Zacks Consensus Estimate of $3.784 billion. Also, reported revenues increased on a quarter-over-quarter basis (up 23%), primarily due to pricing improvement in the DRAM and NAND sales volume. Also, a 5% increase in DRAM average selling prices (ASP) supported the revenue growth.
DRAM products accounted for 61% of total revenue during the quarter. DRAM revenues increased 18% on a sequential basis. On the other hand, NAND sales volume increased around 26% quarter over quarter.
Coming to the Storage Business Unit (SBU), revenues of $860 million were up 13% sequentially.
Revenues from the Mobile Business Unit (MBU) increased 25% sequentially and accounted for around 30% of total revenue. The increase was primarily due to a continuous ramp in the Chinese market and strong growth in LPDRAM and mobile NAND product lines.
The computing and networking business (CNBU) saw an 18% sequential increase in revenues to $1.47 billion, primarily due to an increase in 20-nanometer shipment growth across all segments coupled with pricing improvement.
Revenues from the embedded business came in at $578 million, up 13% from the last quarter, primarily due to strength in the automotive and consumer segments.
Micron’s gross profit was up 19.1% on a year-over-year basis to $1.01 billion. Gross margin was 25.5% compared with 25.39% a year ago, primarily due to a strong pricing environment and higher revenue base.
Selling, general and administrative (SG&A) expenses decreased 11.2% year over year to $159 million. Research and development (R&D) expenses were $470 million, up 11.6% on a year-over-year basis. Operating expenses, as a percentage of revenues, decreased 200 basis points on a year-over-year basis to 16.4%.
Micron reported operating income of $359 million compared with $232 million reported in the year-ago quarter. Operating margin increased 211 bps year over year to 9%.
The company reported adjusted net income (excluding the impact of one-time items but including stock based compensation expense) of approximately $289 million compared with $253 million reported in the year-ago period.
On a GAAP basis, the company reported net income of $180 million compared with the year-ago reported net income of $206 million.
The company exited fiscal first quarter with cash and short-term investments of $4.17 billion compared with $4.39 billion in the previous quarter. Receivables were $2.45 billion compared with $2.07 billion in the previous quarter. Micron’s long-term debt decreased to $8.49 billion from $9.15 billion in the prior quarter.
During the quarter, the company generated cash of $1.138 billion. Capital expenditure was $1.18 billion in the first quarter of fiscal 2017.
Guidance
For the second quarter of fiscal 2017, Micron expects revenues in a range of $4.35 billion to $4.7 billion. The Zacks Consensus Estimate is pegged at $3.898 billion. The company expects earnings per share in the range of 58 cents to 68 cents. The Zacks Consensus Estimate is pegged at earnings of 35 cents.
Management expects gross margin in a range of 31% to 34% in fiscal second quarter 2017. Operating expenses are expected in a range of $590 million to $640 million and operating income is likely to be within $800 million to $900 million.
Going forward, Micron expects favourable supply and demand dynamics to continue in 2017.
Our Take
Micron reported better-than-expected first-quarter fiscal 2017 results. Both the top and the bottom line increased on a year-over-year basis, primarily due to pricing improvement in DRAM and NAND sales volume. The second quarter guidance was also encouraging.
Going forward, the acquisitions of Elpida and Rexchip (now known as Micron Memory Japan, Inc. and Micron Memory Taiwan Co., Ltd., respectively) will increase Micron’s traction in the memory market.
Micron is positive about the product launches and growing demand, particularly that of SSD products. The company has been constantly innovating in memory technologies, spanning DRAM, NAND and NOR Flash memory solutions, which are widely used in the latest mobile computing devices as well as in consumer, networking and embedded products.
However, Western Digital Corporation (WDC - Free Report) , a key player in the NAND space, could increase competition in the industry.
Nonetheless, Micron has outperformed the Zacks categorized Electronic-Semiconductor industry over the last six months. Share price of Micron gained 46.5% compared with the industry’s gain of 24.4%.
Currently, Micron has a Zacks Rank #1 (Strong Buy). Other well-ranked stocks in the technology sector include NVIDIA Corporation (NVDA - Free Report) and Applied Materials, Inc. (AMAT - Free Report) , both of which carry a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here
NVIDIA and Applied Materials have a long term-expected EPS growth rate of 10.3% and 13.7%, respectively.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 ""Strong Buy"" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 ""Strong Sells"" and other private research. See these stocks free >>