Micron’s non-GAAP operating income of $694 million declined from $4.4 billion in the year-ago quarter. Moreover, IMFT related underutilization charges had a negative impact of nearly 200 basis points. Non-GAAP gross margin fell from 61.3% in the year-ago quarter to 30.6%, attributable to lower pricing of both DRAM and NAND. Micron’s non-GAAP gross profit of $1.45 billion slumped 71% from the prior-year period. Revenues from the Storage Business Unit (SBU) comprising SSD NAND components and 3D XPoint totaled $848 million, down 32% on a year-over-year basis but up 4% sequentially. The Embedded Business Unit revenues logged $705 million, down 24% from the year-ago quarter but up 1% from the previous quarter. The company’s reinforced product portfolio helped its mobile business gain shares. A firm uptick in both DRAM and NAND bits owing to seasonality and persistent content growth in smartphones is a positive. The metric improved 20% sequentially though. Revenues from the Mobile Business Unit (MBU) of $1.4 billion softened 26% on a year-over-year basis. Weak pricing across most market segments remained a dampener. Moreover, the company is also seeing restrained supply in specific portions of the market.īusiness unit wise, revenues of the computing and networking business (CNBU) unit deteriorated 56% from the year-ago quarter and 8% sequentially to $1.9 billion. However, management mentioned that NAND prices are starting to surge. While NAND ASP decreased in the upper single-digit’s percentage band, shipment quantities improved in the low-to-mid teens percent range sequentially. NAND revenues of $1.5 billion, representing 31% of the total top line, were down 32% on a year-over-year basis but up 5% quarter over quarter. Additionally, in automotive sector, the company continued to boost revenues on a year-over-year basis, despite waning auto industry unit sales and a tough DRAM industry environment.
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Further, with CPU shortages subsiding, growth in DRAM module and SSD shipments was a positive in the PC market. In graphics market, increasing demand for graphics cards and gaming consoles aided solid sequential DRAM bit growth. Moreover, new processor platforms are boosting demand for higher-density and higher-performance DRAM modules. Management mentioned that a significant depletion in customer inventories for DRAM led to strong sequential growth in demand for server solutions in both cloud and enterprise markets. With improvement in customer inventories, bit shipments surged nearly 30% sequentially and in the mid-teens percent range year over year. That sounds drastic, but the top line is only expected to fall 16% to $19.6 billion from last year's $23.4 billion.ĭRAM revenues of $3.1 billion, accounting for 63% of total revenues in the quarter under discussion, plunged 48% year over year.
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So far, the EPS consensus for the current quarter ending in November has only been notched down from 52-c to 51-c.īut the full year FY20 consensus has risen from $2.68 to $2.75, representing a 57% earnings decline from last year. The mid-point of 46-cents is significantly below the current Zacks Consensus Estimate of 52-cents. The company projects earnings in the range of 39-53 cents per share for the fiscal first quarter. Notably, the company’s weak earnings and gross margin guidance for fiscal 2020 is a point of concern.
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Restriction on sales to Huawei negatively impacted the Micron's revenues in their final quarter of FY19.įurther, the company fears a worsening decline in sales to Huawei over the coming quarters in case it fails to secure the license to ship additional products to Huawei or if the trade ban is not removed. However, the uncertainty hovering over trade and the economy is a major overhang on the company.
Many analyst who track the prices of memory products and demand have been plotting out the slowly-forming bottom and recovery.
Micron’s revenues of $4.87 billion in the quarter under review exceeded the Zacks Consensus Estimate of $4.52 billion but dropped around 42% on a year-over-year basis.Īlthough the company suffered a drastic year-over-year fall in revenues and earnings, its better-than-expected fourth-quarter fiscal 2019 results coupled with an improved 2020 outlook for DRAM are making investors hopeful.ĭRAM and NAND prices had fallen substantially in the past year as customers built up inventory levels and demand dried up.