A month has passed by because the final earnings report for Micron (MU). Shares have misplaced about 2.8% in that timeframe, underperforming the S&P 500.
Will the current unfavourable development proceed main as much as its subsequent earnings launch, or is Micron due for a breakout? Earlier than we dive into how buyers and analysts have reacted as of late, let’s take a fast have a look at its most up-to-date earnings report with a purpose to get a greater deal with on the essential catalysts.
Micron Crushes This autumn Earnings & Income Estimates, Up Y/Y
Micron ended fiscal 2024 on a powerful notice by reporting sturdy fourth-quarter outcomes. Fourth-quarter high and backside strains surpassed the Zacks Consensus Estimate and marked a major year-over-year enchancment. Trying on the key metrics, whereas quarterly revenues got here on the excessive finish of the administration steering vary, gross margin and earnings per share (EPS) exceeded the steering.
Micron reported non-GAAP EPS of $1.18, increased than the consensus mark of $1.10 and administration’s forecast of $1.08 (+/- 8 cents). The underside-line end result registered sturdy enchancment from the year-ago quarter’s lack of $1.07 per share and the earlier quarter’s earnings of 62 cents per share.
Micron’s quarterly revenues soared 93% yr over yr and 14% sequentially to $7.75 billion. The highest line additionally surpassed the Zacks Consensus Estimate of $7.64 billion and got here on the excessive finish of administration’s steering of $7.60 billion (+/- $200 million).
Micron’s better-than-expected fourth-quarter efficiency displays the advantages of the strong demand for the synthetic intelligence (AI) product portfolio, which resulted in increased pricing for DRAM (Dynamic Random Entry Reminiscence) and NAND. Robust gross sales executions and an enhancing supply-demand surroundings additionally aided progress within the fourth-quarter high and backside strains.
Micron This autumn Prime-Line Particulars
Expertise-wise, DRAM revenues of $5.33 billion, accounting for 69% of the whole revenues within the fiscal fourth quarter, elevated 93% yr over yr and 14% sequentially. Whereas bit shipments had been flat sequentially, the typical promoting value (ASP) rose within the mid-teen proportion vary on a quarter-over-quarter foundation.
NAND revenues of $2.37 billion, representing 31% of the whole high line, had been up 96% yr over yr and 15% quarter over quarter. NAND bit cargo and ASP every elevated within the high-single-digit proportion vary sequentially.
Different revenues had been $59 million within the reported quarter, up from $50 million within the year-ago quarter and $54 million within the earlier quarter.
Enterprise segment-wise, revenues of $3.02 billion from the Computing and Networking Enterprise Unit soared 152% from the year-ago quarter and 17% sequentially. Revenues of $1.88 billion from the Cell Enterprise Unit jumped 55% on a year-over-year foundation and 18% on a quarter-over-quarter foundation.
The Embedded Enterprise Unit’s revenues had been $1.17 billion, up 36% from the year-ago interval however down 9% from the earlier quarter. Revenues from the Storage Enterprise Unit, comprising solid-state drive NAND elements, totaled $1.68 billion, up 127% yr over yr and 24% sequentially.
Micron’s This autumn Working Particulars
For the fourth quarter, Micron posted a non-GAAP gross revenue of $2.83 billion, a sturdy enchancment from the earlier quarter’s $1.92 billion and the year-ago quarter’s non-GAAP gross lack of $366 million. The fourth-quarter non-GAAP gross margin of 36.5% additionally improved from the second quarter’s 28.1%. Within the year-ago quarter, it had registered a unfavourable gross margin of 9.1%.
Non-GAAP working bills had been $1.08 billion in contrast with the earlier quarter’s $976 million and the year-ago quarter’s $842 million.
Micron’s non-GAAP working revenue of $1.75 billion was manner increased than the earlier quarter’s non-GAAP working revenue of $941 million. It additionally reveals enchancment from the year-ago quarter’s non-GAAP working lack of $1.21 billion.
The non-GAAP working margin got here in at 22.5%. Micron posted a non-GAAP working margin of 13.8% for the third quarter of fiscal 2024, whereas it had a non-GAAP working margin of unfavourable 30.1%.
Micron’s Stability Sheet & Money Movement
Micron exited the reported quarter with money and investments of $9.16 billion in contrast with the $9.22 billion recorded on the finish of the prior quarter. It ended the quarter with complete liquidity of $11.7 billion, flat in comparison with the earlier quarter.
Micron’s complete debt, as of Aug. 29, 2024, was $13.4 billion in contrast with the $12.9 billion witnessed on the finish of the third quarter.
The corporate generated an working money move of $3.41 billion within the fourth quarter. It spent $3.1 billion on capital expenditure in the course of the quarter, leading to an adjusted free money move of $323 million. MU paid out $128 million in dividends and repurchased shares price $300 million in the course of the reported quarter.
Micron’s Q1 Outlook
Micron guided for the primary quarter of fiscal 2025. The corporate anticipates revenues of $8.70 billion (+/-$200 million) for the fiscal first quarter. For the fiscal first quarter, MU initiatives a non-GAAP gross margin of 39.5% (+/-100 foundation factors). Working bills on a non-GAAP foundation are estimated to be $1.085 billion (+/-$15 million). Adjusted EPS is anticipated to be $1.74 (+/- 8 cents).
How Have Estimates Been Transferring Since Then?
Previously month, buyers have witnessed an upward development in estimates revision.
VGM Scores
Presently, Micron has a pleasant Development Rating of B, although it’s lagging rather a lot on the Momentum Rating entrance with an F. Nonetheless, the inventory was allotted a grade of C on the worth facet, placing it within the center 20% for this funding technique.
General, the inventory has an mixture VGM Rating of B. If you happen to aren’t targeted on one technique, this rating is the one try to be taken with.
Outlook
Estimates have been broadly trending upward for the inventory, and the magnitude of those revisions appears to be like promising. Notably, Micron has a Zacks Rank #3 (Maintain). We anticipate an in-line return from the inventory within the subsequent few months.
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Micron Technology, Inc. (MU) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.
