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Micron (MU) Q4 Earnings and Revenues Plunge on Weak Demand
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Micron Technology (MU - Free Report) ended fiscal 2022 on a disappointing note as fourth-quarter earnings and revenues declined on a year-over-year basis. The company’s fiscal fourth-quarter non-GAAP earnings per share (EPS) plunged 40% year over year to $1.45. However, the bottom line surpassed the Zacks Consensus Estimate of $1.40 per share.
Quarterly revenues decreased 19.7% year over year to $6.64 billion and missed the Zacks Consensus Estimate of $6.88 billion as well. The company blamed rapidly weakening consumer demand and substantial customer inventory adjustments across end markets as the main reason behind the dismal quarterly performance.
Q4 Revenue Details
Dynamic random access memory revenues of $4.81 billion, accounting for 72% of the total revenues in the fiscal third quarter, declined 21% year over year and 23% sequentially. Bit shipments decreased approximately 10% sequentially, while the average selling price (ASP) plunged in the low-teens percentage on a quarter-over-quarter basis.
NAND revenues of $1.69 billion, representing 25% of the total top line, were down 14% on a year-over-year basis and 26% quarter over quarter. While NAND ASP decreased in the mid-to-high,single-digit percentage sequentially, bit shipments declined in the low-20s percentage range.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Segment-wise, revenues of $2.93 billion from the computing and networking business unit plunged 23% from the year-ago quarter and 25% sequentially. Revenues of $1.51 billion from the Mobile Business Unit declined 20% on a year-over-year basis and 23% on a quarter-over-quarter basis.
Embedded Business Unit’s revenues logged in $1.3 billion, down 4% from the year-ago period and 9% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive (SSD) NAND components, totaled $891 million, down 26% year over year and 34% sequentially.
Margins
Micron’s non-GAAP gross profit of $2.68 billion plunged 32.5% year over year and 34.7% sequentially. The non-GAAP gross margin of 40% reflects a significant decline from the year-ago quarter’s 48% and 47% in the third quarter of fiscal 2022.
Micron’s non-GAAP operating income of $1.66 billion soared 45.9% year over year and 47.1% sequentially. The non-GAAP operating margin declined to 25% from the year-earlier quarter’s 37% and the previous quarter’s 36%.
Non-GAAP operating expenses came in at $1.01 billion compared with the previous quarter’s $953 million and the year-ago quarter’s $891 million.
Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $11.1 billion compared with the $11.98 billion recorded at the end of the prior quarter. Furthermore, MU ended the quarter with total liquidity of $13.6 billion compared with the $14.5 billion witnessed at the end of the third quarter of fiscal 2022.
Micron’s long-term debt as of Sep 1, 2022 was $6.9 billion compared with the $7 billion witnessed at the end of the third quarter.
The company generated an operating cash flow of $3.8 billion during the fiscal third quarter and a free cash flow of $196 million. It repurchased stocks worth $784 million and paid approximately $126 million in dividends.
In fiscal 2022, Micron generated operating and free cash flows of $15.2 billion and $3.2 billion, respectively. During the period, it repurchased stocks worth $2.4 billion and paid $461 million in dividends.
Guidance
Micron provided guidance for the first quarter of fiscal 2023. The company anticipates revenues of $4.25 billion (+/-$250 million) for the fiscal first quarter, significantly lower than the Zacks Consensus Estimate of $5.90 billion.
For the fiscal first quarter, MU projects a non-GAAP gross margin of 26% (+/-200 bps). Operating expenses on a non-GAAP basis are estimated at $1 billion (+/-$25 million).
The adjusted EPS is anticipated at 4 cents (+/-10 cents). The consensus mark is pegged at 72 cents per share.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #5 (Strong Sell). Shares of MU have decreased 46.3% year to date (YTD).
The Zacks Consensus Estimate for EPAM's third-quarter fiscal 2022 earnings has been revised upward by 7 cents to $2.52 per share over the past 30 days. For fiscal 2022, earnings estimates have moved 17 cents north to $9.96 per share in the past 30 days.
EPAM’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.1%. Shares of EPAM have plunged 45.8% YTD.
The Zacks Consensus Estimate for CDW’s third-quarter 2022 earnings has increased from $2.49 to $2.52 per share over the past 60 days. For 2022, earnings estimates have moved up by 8 cents to $9.66 per share in the past 60 days.
CDW’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.8%. Shares of CDW have decreased 22.3% YTD.
The Zacks Consensus Estimate for Monolithic Power's third-quarter 2022 earnings has been revised 34 cents northward to $3.49 per share over the past 60 days. For 2022, earnings estimates have moved 95 cents north to $12.56 per share in the past 60 days.
MPWR's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.8%. Shares of the company have decreased 25.9% YTD.
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Micron (MU) Q4 Earnings and Revenues Plunge on Weak Demand
Micron Technology (MU - Free Report) ended fiscal 2022 on a disappointing note as fourth-quarter earnings and revenues declined on a year-over-year basis. The company’s fiscal fourth-quarter non-GAAP earnings per share (EPS) plunged 40% year over year to $1.45. However, the bottom line surpassed the Zacks Consensus Estimate of $1.40 per share.
Quarterly revenues decreased 19.7% year over year to $6.64 billion and missed the Zacks Consensus Estimate of $6.88 billion as well. The company blamed rapidly weakening consumer demand and substantial customer inventory adjustments across end markets as the main reason behind the dismal quarterly performance.
Q4 Revenue Details
Dynamic random access memory revenues of $4.81 billion, accounting for 72% of the total revenues in the fiscal third quarter, declined 21% year over year and 23% sequentially. Bit shipments decreased approximately 10% sequentially, while the average selling price (ASP) plunged in the low-teens percentage on a quarter-over-quarter basis.
NAND revenues of $1.69 billion, representing 25% of the total top line, were down 14% on a year-over-year basis and 26% quarter over quarter. While NAND ASP decreased in the mid-to-high,single-digit percentage sequentially, bit shipments declined in the low-20s percentage range.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Segment-wise, revenues of $2.93 billion from the computing and networking business unit plunged 23% from the year-ago quarter and 25% sequentially. Revenues of $1.51 billion from the Mobile Business Unit declined 20% on a year-over-year basis and 23% on a quarter-over-quarter basis.
Embedded Business Unit’s revenues logged in $1.3 billion, down 4% from the year-ago period and 9% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive (SSD) NAND components, totaled $891 million, down 26% year over year and 34% sequentially.
Margins
Micron’s non-GAAP gross profit of $2.68 billion plunged 32.5% year over year and 34.7% sequentially. The non-GAAP gross margin of 40% reflects a significant decline from the year-ago quarter’s 48% and 47% in the third quarter of fiscal 2022.
Micron’s non-GAAP operating income of $1.66 billion soared 45.9% year over year and 47.1% sequentially. The non-GAAP operating margin declined to 25% from the year-earlier quarter’s 37% and the previous quarter’s 36%.
Non-GAAP operating expenses came in at $1.01 billion compared with the previous quarter’s $953 million and the year-ago quarter’s $891 million.
Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $11.1 billion compared with the $11.98 billion recorded at the end of the prior quarter. Furthermore, MU ended the quarter with total liquidity of $13.6 billion compared with the $14.5 billion witnessed at the end of the third quarter of fiscal 2022.
Micron’s long-term debt as of Sep 1, 2022 was $6.9 billion compared with the $7 billion witnessed at the end of the third quarter.
The company generated an operating cash flow of $3.8 billion during the fiscal third quarter and a free cash flow of $196 million. It repurchased stocks worth $784 million and paid approximately $126 million in dividends.
In fiscal 2022, Micron generated operating and free cash flows of $15.2 billion and $3.2 billion, respectively. During the period, it repurchased stocks worth $2.4 billion and paid $461 million in dividends.
Guidance
Micron provided guidance for the first quarter of fiscal 2023. The company anticipates revenues of $4.25 billion (+/-$250 million) for the fiscal first quarter, significantly lower than the Zacks Consensus Estimate of $5.90 billion.
For the fiscal first quarter, MU projects a non-GAAP gross margin of 26% (+/-200 bps). Operating expenses on a non-GAAP basis are estimated at $1 billion (+/-$25 million).
The adjusted EPS is anticipated at 4 cents (+/-10 cents). The consensus mark is pegged at 72 cents per share.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #5 (Strong Sell). Shares of MU have decreased 46.3% year to date (YTD).
Some better-ranked stocks from the broader Computer and Technology sector are EPAM Systems (EPAM - Free Report) , CDW Corporation (CDW - Free Report) and Monolithic Power (MPWR - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for EPAM's third-quarter fiscal 2022 earnings has been revised upward by 7 cents to $2.52 per share over the past 30 days. For fiscal 2022, earnings estimates have moved 17 cents north to $9.96 per share in the past 30 days.
EPAM’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 23.1%. Shares of EPAM have plunged 45.8% YTD.
The Zacks Consensus Estimate for CDW’s third-quarter 2022 earnings has increased from $2.49 to $2.52 per share over the past 60 days. For 2022, earnings estimates have moved up by 8 cents to $9.66 per share in the past 60 days.
CDW’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 6.8%. Shares of CDW have decreased 22.3% YTD.
The Zacks Consensus Estimate for Monolithic Power's third-quarter 2022 earnings has been revised 34 cents northward to $3.49 per share over the past 60 days. For 2022, earnings estimates have moved 95 cents north to $12.56 per share in the past 60 days.
MPWR's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.8%. Shares of the company have decreased 25.9% YTD.