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Micron Tops Q4 Earnings Estimates: Can Strong Guidance Lift the Stock?
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Micron Technology, Inc. (MU - Free Report) ended fiscal 2024 on a strong note by reporting strong fourth-quarter results. Fourth-quarter top and bottom lines surpassed the Zacks Consensus Estimate and marked a significant year-over-year improvement. Looking at the key metrics, while quarterly revenues came at the high end of the management guidance range, gross margin and earnings per share (EPS) exceeded the guidance.
Micron reported non-GAAP EPS of $1.18, higher than the consensus mark of $1.10 and management’s forecast of $1.08 (+/- 8 cents). The bottom-line result registered strong improvement from the year-ago quarter’s loss of $1.07 per share and the previous quarter’s earnings of 62 cents per share.
Micron’s quarterly revenues soared 93% year over year and 14% sequentially to $7.75 billion. The top line also surpassed the Zacks Consensus Estimate of $7.64 billion and came at the high end of management’s guidance of $7.60 billion (+/- $200 million).
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron’s better-than-expected fourth-quarter performance reflects the benefits of the robust demand for the artificial intelligence (AI) product portfolio, which resulted in higher pricing for DRAM (Dynamic Random Access Memory) and NAND. Strong sales executions and an improving supply-demand environment also aided growth in the fourth-quarter top and bottom lines.
Buoyed by better-than-expected fourth-quarter performance, Micron provided strong guidance for the first quarter of fiscal 2025. The company forecasts record revenues for the first quarter, which exceeded analysts’ expectations. Its projections for first-quarter EPS also exceeded the estimates.
Shares of Micron have remained highly volatile so far this year due to macroeconomic uncertainties. The stock has lost 18.1% of its value in the past three months, underperforming the S&P 500’s gain of 3.9% during the same time frame. However, its recently reported upbeat fourth-quarter results and strong guidance for the forthcoming quarters will boost investors’ confidence in Micron’s prospects, thereby driving the share prices higher in the near term.
Micron Q4 Top-Line Details
Technology-wise, DRAM revenues of $5.33 billion, accounting for 69% of the total revenues in the fiscal fourth quarter, increased 93% year over year and 14% sequentially. While bit shipments were flat sequentially, the average selling price (ASP) rose in the mid-teen percentage range on a quarter-over-quarter basis.
NAND revenues of $2.37 billion, representing 31% of the total top line, were up 96% year over year and 15% quarter over quarter. NAND bit shipment and ASP each increased in the high-single-digit percentage range sequentially.
Other revenues were $59 million in the reported quarter, up from $50 million in the year-ago quarter and $54 million in the previous quarter.
Business segment-wise, revenues of $3.02 billion from the Computing and Networking Business Unit soared 152% from the year-ago quarter and 17% sequentially. Revenues of $1.88 billion from the Mobile Business Unit jumped 55% on a year-over-year basis and 18% on a quarter-over-quarter basis.
The Embedded Business Unit’s revenues were $1.17 billion, up 36% from the year-ago period but down 9% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.68 billion, up 127% year over year and 24% sequentially.
Micron’s Q4 Operating Details
For the fourth quarter, Micron posted a non-GAAP gross profit of $2.83 billion, a robust improvement from the previous quarter’s $1.92 billion and the year-ago quarter’s non-GAAP gross loss of $366 million. The fourth-quarter non-GAAP gross margin of 36.5% also improved from the second quarter’s 28.1%. In the year-ago quarter, it had registered a negative gross margin of 9.1%.
Non-GAAP operating expenses were $1.08 billion compared with the previous quarter’s $976 million and the year-ago quarter’s $842 million.
Micron’s non-GAAP operating income of $1.75 billion was way higher than the previous quarter’s non-GAAP operating income of $941 million. It also shows improvement from the year-ago quarter’s non-GAAP operating loss of $1.21 billion.
The non-GAAP operating margin came in at 22.5%. Micron posted a non-GAAP operating margin of 13.8% for the third quarter of fiscal 2024, while it had a non-GAAP operating margin of negative 30.1%.
Micron’s Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $9.16 billion compared with the $9.22 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $11.7 billion, flat when compared with the previous quarter.
Micron’s total debt, as of Aug. 29, 2024, was $13.4 billion compared with the $12.9 billion witnessed at the end of the third quarter.
The company generated an operating cash flow of $3.41 billion in the fourth quarter. It spent $3.1 billion on capital expenditure during the quarter, resulting in an adjusted free cash flow of $323 million. MU paid out $128 million in dividends and repurchased shares worth $300 million during the reported quarter.
Micron’s Q1 Outlook
Micron guided for the first quarter of fiscal 2025. The company anticipates revenues of $8.70 billion (+/-$200 million) for the fiscal first quarter. The Zacks Consensus Estimate stands at $8.54 billion.
For the fiscal first quarter, MU projects a non-GAAP gross margin of 39.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.085 billion (+/-$15 million).
Adjusted EPS is anticipated to be $1.74 (+/- 8 cents). The consensus mark is pegged at a loss of $1.68 per share.
The consensus mark for Aspen’s fiscal 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 60 days, indicating a 12.8% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 13.1%. The stock has soared 15.5% over the past three months.
The Zacks Consensus Estimate for Yelp’s 2024 earnings has been revised upward by 4 cents to $1.65 per share in the past 30 days, suggesting a year-over-year increase of 22.2%. It has a long-term earnings growth expectation of 25.8%. Shares of YELP have declined 7.5% in the last three months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 27.6% over the past three months.
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Micron Tops Q4 Earnings Estimates: Can Strong Guidance Lift the Stock?
Micron Technology, Inc. (MU - Free Report) ended fiscal 2024 on a strong note by reporting strong fourth-quarter results. Fourth-quarter top and bottom lines surpassed the Zacks Consensus Estimate and marked a significant year-over-year improvement. Looking at the key metrics, while quarterly revenues came at the high end of the management guidance range, gross margin and earnings per share (EPS) exceeded the guidance.
Micron reported non-GAAP EPS of $1.18, higher than the consensus mark of $1.10 and management’s forecast of $1.08 (+/- 8 cents). The bottom-line result registered strong improvement from the year-ago quarter’s loss of $1.07 per share and the previous quarter’s earnings of 62 cents per share.
Micron’s quarterly revenues soared 93% year over year and 14% sequentially to $7.75 billion. The top line also surpassed the Zacks Consensus Estimate of $7.64 billion and came at the high end of management’s guidance of $7.60 billion (+/- $200 million).
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Micron’s better-than-expected fourth-quarter performance reflects the benefits of the robust demand for the artificial intelligence (AI) product portfolio, which resulted in higher pricing for DRAM (Dynamic Random Access Memory) and NAND. Strong sales executions and an improving supply-demand environment also aided growth in the fourth-quarter top and bottom lines.
Buoyed by better-than-expected fourth-quarter performance, Micron provided strong guidance for the first quarter of fiscal 2025. The company forecasts record revenues for the first quarter, which exceeded analysts’ expectations. Its projections for first-quarter EPS also exceeded the estimates.
Shares of Micron have remained highly volatile so far this year due to macroeconomic uncertainties. The stock has lost 18.1% of its value in the past three months, underperforming the S&P 500’s gain of 3.9% during the same time frame. However, its recently reported upbeat fourth-quarter results and strong guidance for the forthcoming quarters will boost investors’ confidence in Micron’s prospects, thereby driving the share prices higher in the near term.
Micron Q4 Top-Line Details
Technology-wise, DRAM revenues of $5.33 billion, accounting for 69% of the total revenues in the fiscal fourth quarter, increased 93% year over year and 14% sequentially. While bit shipments were flat sequentially, the average selling price (ASP) rose in the mid-teen percentage range on a quarter-over-quarter basis.
NAND revenues of $2.37 billion, representing 31% of the total top line, were up 96% year over year and 15% quarter over quarter. NAND bit shipment and ASP each increased in the high-single-digit percentage range sequentially.
Other revenues were $59 million in the reported quarter, up from $50 million in the year-ago quarter and $54 million in the previous quarter.
Business segment-wise, revenues of $3.02 billion from the Computing and Networking Business Unit soared 152% from the year-ago quarter and 17% sequentially. Revenues of $1.88 billion from the Mobile Business Unit jumped 55% on a year-over-year basis and 18% on a quarter-over-quarter basis.
The Embedded Business Unit’s revenues were $1.17 billion, up 36% from the year-ago period but down 9% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.68 billion, up 127% year over year and 24% sequentially.
Micron’s Q4 Operating Details
For the fourth quarter, Micron posted a non-GAAP gross profit of $2.83 billion, a robust improvement from the previous quarter’s $1.92 billion and the year-ago quarter’s non-GAAP gross loss of $366 million. The fourth-quarter non-GAAP gross margin of 36.5% also improved from the second quarter’s 28.1%. In the year-ago quarter, it had registered a negative gross margin of 9.1%.
Non-GAAP operating expenses were $1.08 billion compared with the previous quarter’s $976 million and the year-ago quarter’s $842 million.
Micron’s non-GAAP operating income of $1.75 billion was way higher than the previous quarter’s non-GAAP operating income of $941 million. It also shows improvement from the year-ago quarter’s non-GAAP operating loss of $1.21 billion.
The non-GAAP operating margin came in at 22.5%. Micron posted a non-GAAP operating margin of 13.8% for the third quarter of fiscal 2024, while it had a non-GAAP operating margin of negative 30.1%.
Micron’s Balance Sheet & Cash Flow
Micron exited the reported quarter with cash and investments of $9.16 billion compared with the $9.22 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $11.7 billion, flat when compared with the previous quarter.
Micron’s total debt, as of Aug. 29, 2024, was $13.4 billion compared with the $12.9 billion witnessed at the end of the third quarter.
The company generated an operating cash flow of $3.41 billion in the fourth quarter. It spent $3.1 billion on capital expenditure during the quarter, resulting in an adjusted free cash flow of $323 million. MU paid out $128 million in dividends and repurchased shares worth $300 million during the reported quarter.
Micron’s Q1 Outlook
Micron guided for the first quarter of fiscal 2025. The company anticipates revenues of $8.70 billion (+/-$200 million) for the fiscal first quarter. The Zacks Consensus Estimate stands at $8.54 billion.
For the fiscal first quarter, MU projects a non-GAAP gross margin of 39.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.085 billion (+/-$15 million).
Adjusted EPS is anticipated to be $1.74 (+/- 8 cents). The consensus mark is pegged at a loss of $1.68 per share.
Micron Zacks Rank & Stocks to Consider
Micron currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Aspen Technology (AZPN - Free Report) , Yelp (YELP - Free Report) and Fortinet (FTNT - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The consensus mark for Aspen’s fiscal 2025 earnings has been revised upward by 70 cents to $7.43 per share over the past 60 days, indicating a 12.8% year-over-year increase. The long-term expected earnings growth rate for the stock stands at 13.1%. The stock has soared 15.5% over the past three months.
The Zacks Consensus Estimate for Yelp’s 2024 earnings has been revised upward by 4 cents to $1.65 per share in the past 30 days, suggesting a year-over-year increase of 22.2%. It has a long-term earnings growth expectation of 25.8%. Shares of YELP have declined 7.5% in the last three months.
The Zacks Consensus Estimate for Fortinet’s 2024 earnings has been revised upward by 2 cents to $2.03 per share in the past 30 days, indicating an increase of 24.5% on a year-over-year basis. It has a long-term earnings growth expectation of 16.3%. Shares of FTNT have jumped 27.6% over the past three months.