Micron Technology MU reported second-quarter fiscal 2024 non-GAAP earnings of 42 cents per share, in contrast to the Zacks Consensus Estimate of a loss of 27 cents. The company incurred a loss of 95 cents in the previous quarter and $1.91 in the year-ago quarter.
MU’s quarterly revenues soared 58% year over year and 23% sequentially to $5.8 billion. The top line also surpassed the Zacks Consensus Estimate of $5.33 billion. The company’s shares gained 17% in the pre-market session.
Micron Technology’s better-than-expected fiscal second-quarter performance reflects the benefits of improved market conditions and strong sales executions. The company experienced double-digit growth in the compute and networking, storage, as well as mobile business units.
Micron Technology, Inc. Price, Consensus and EPS Surprise
Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. Quote
Q1 Top-Line Details
Dynamic Random Access Memory (DRAM) revenues of $4.16 billion, accounting for 71% of the total revenues in the fiscal second quarter, increased 55.5% year over year and 21% sequentially. Bit shipments increased in the low-single-digit percentage range sequentially, while the average selling price (ASP) rose in the high-teen percentage range on a quarter-over-quarter basis.
NAND revenues of $1.57 billion, representing 27% of the total top line, were up 80.8% on a year-over-year basis and 27% quarter over quarter. While NAND ASP increased more than 30% sequentially, bit shipments decreased in the low-single-digit percentage range.
Other revenues were 2% of the total revenues of $99 million in the reported quarter.
Segment-wise, revenues of $2.2 billion from the computing and networking business unit increased 57.14% from the year-ago quarter and jumped 26% sequentially. Revenues of $1.6 billion from the mobile business unit surged 69.3% on a year-over-year basis and increased 24% on a quarter-over-quarter basis.
The embedded business unit’s revenues were $1.1 billion, up 61.8% from the year-ago period and 7% from the previous quarter. Revenues from the storage business unit, comprising solid-state drive NAND components, totaled $905 million, up 78.9% year over year and 39% sequentially.
Operating Details
For the fiscal second quarter, MU posted a non-GAAP gross profit of $1.163 billion against a non-GAAP loss of $1.161 billion reported in the year-ago quarter and $37 million in the previous quarter.
The non-GAAP gross margin of 20% reflects a significant improvement from the previous quarter’s non-GAAP gross margin of 0.8%.
Non-GAAP operating expenses came in at $959 million compared with the previous quarter’s $992 million and the year-ago quarter’s $916 million.
Micron Technology’s non-GAAP operating income was $204 million against the year-ago quarter’s non-GAAP operating loss of $2.08 billion. The company reported non-GAAP operating loss of $955 million in the previous quarter.
Balance Sheet & Cash Flow
Micron Technology exited the reported quarter with cash and investments of $9.7 billion compared with $9.84 billion recorded at the end of the prior quarter. It ended the quarter with total liquidity of $12.2 billion, marginally down from $12.3 billion reported in the prior quarter.
MU’s long-term debt as of Feb 29, 2024 was $13.7 billion compared with $13.5 billion recorded at the end of the first quarter of fiscal 2024.
The company generated an operating cash flow of $1.2 billion in the second quarter. It spent $1.2 billion in capital expenditure during the quarter, free cash flow being at the breakeven. The company paid out $256 million in dividends during the reported quarter.
Micron Technology announced that its board approved a quarterly cash dividend of 11.5 cents per share, payable on Apr 16, 2024, to shareholders of record as of Apr 1, 2024. However, the company did not repurchase any stocks during the quarter.
Outlook
Micron Technology provided guidance for the third quarter of fiscal 2024. The company anticipates revenues of $6.60 billion (± $200 million). The Zacks Consensus Estimate is pegged at $5.89 billion.
For the fiscal third quarter, MU projects a non-GAAP gross margin of 26% (+/-150 basis points). Operating expenses on a non-GAAP basis are estimated at $990 million (+/-$15 million).
The adjusted loss per share is anticipated at 45 cents (+/-7 cents). The consensus mark is pegged at earnings of 15 cents per share.
For the fiscal third quarter, MU expects that DRAM bit shipments will experience a slight decrease, while NAND bit shipments are forecasted to see a moderate increase compared with the levels seen in the second quarter. Despite a general uptick in demand, supply remains low, particularly in the leading edge.
Zacks Rank and Other Stocks to Consider
Currently, Micron Technology carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the broader technology sector are Logitech International LOGI, META Platforms META and monday.com MNDY, 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 Zacks Consensus Estimate for Logitech’s fiscal 2024 earnings has been revised upward by 45 cents per share to $3.88 in the past 60 days. Shares of LOGI have plunged 68.5% in the past year.
The Zacks Consensus Estimate for META’s fiscal 2024 earnings has been revised by 12 cents northward to $19.94 per share in the past 30 days. Shares of META have rallied 150.1% in the past year.
The Zacks Consensus Estimate for MNDY’s fiscal 2024 earnings has been revised upward by 5 cents to $1.88 per share in the past 30 days. Shares of MNDY have surged 68.6% in the past year.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Logitech International S.A. (LOGI) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
monday.com Ltd. (MNDY) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
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