01—Abstract
Summary
Summary of the 10-K filed October 26, 2017. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported a significant turnaround in its fiscal year 2017, concluding on August 30, 2017, with a substantial increase in net sales and a return to profitability after a net loss in the prior year.
Net sales grew by an impressive 64% year-over-year, reaching $20.32 billiona, driven by strong market conditions and increased demand across all its operating segments, particularly in enterprise, mobile, client, and SSD storage. This strong performance translated into a healthy gross margin of 42% and operating income of $5.87 billion, a marked improvement from the previous year's $168 million.
The company successfully integrated the acquisition of Inotera, which bolstered its DRAM capabilities, and continued to invest heavily in research and development, spending $1.82 billionb to drive innovation in technologies like 3D NAND and 3D XPoint memory. The company ended the fiscal year with a solid cash position and a clear focus on expanding its high-value product offerings, positioning itself favorably for continued growth in the dynamic memory and storage market.
02—Key points
Key Highlights
- Net sales surged by 64% to $20.32 billion in fiscal year 2017, recovering from a decline in the previous year.
- Gross margin improved significantly to 42% in fiscal year 2017, up from 20% in fiscal year 2016, reflecting favorable pricing and cost reductions.
- Operating income saw a dramatic increase to $5.87 billion in fiscal year 2017, a substantial rebound from $168 million in fiscal year 2016.
- The company made significant capital expenditures of $4.73 billion in fiscal year 2017, primarily for property, plant, and equipment, to support growth and technological advancements.
- Micron completed the acquisition of the remaining 67% interest in Inotera, strengthening its DRAM manufacturing capabilities.
- Research and development expenses increased to $1.82 billion, underscoring the company's commitment to innovation in advanced memory and storage technologies.
- The company's stock price experienced significant growth throughout the fiscal year, as indicated by its performance graph, with prices ranging from $16.62 to $32.50 in 2017.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2017, Micron Technology Inc kept $0.25.
- Revenue$20.32B100.0%
- Cost of revenue−$11.89B58.5%
- Gross profit$8.44B41.5%
- Operating costs−$2.57B12.6%
- Operating income$5.87B28.9%
- Interest, other & tax−$779.0M3.8%
- Net income$5.09B25.0%
Where FY2017 revenue went
$20.32B- Cost of revenue: $11.89B, 58% of revenue
- Net income: $5.09B, 25% of revenue
- R&D: $1.82B, 9.0% of revenue
- SG&A: $743.0M, 3.7% of revenue
- Interest, other & tax: $779.0M, 3.8% of revenue
Kept 25% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2017filed October 26, 2017Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $20.32B$12.40B | +63.9% |
| Cost of Revenue | $11.89B$9.89B | +20.1% |
| Gross Profit | $8.44B$2.50B | +236.8% |
| R&D Expenses | $1.82B$1.62B | +12.8% |
| SG&A Expenses | $743.00M$659.00M | +12.7% |
| Operating Income | $5.87B$168.00M | +3392.9% |
| Interest Expense | $601.00M$437.00M | +37.5% |
| Net Income | $5.09B-$276.00M | +1943.8% |
| EPS (Basic) | $4.67$-0.27 | +1829.6% |
| EPS (Diluted) | $4.41$-0.27 | +1733.3% |
| Shares Outstanding (Basic) | 1.09B1.04B | +5.1% |
| Shares Outstanding (Diluted) | 1.15B1.04B | +11.4% |
05—Questions
Frequently Asked Questions
What was Micron's financial performance in fiscal year 2017?
Micron Technology experienced a strong recovery in fiscal year 2017. Net sales increased by 64% to $20.32 billion, and the company achieved a gross margin of 42% and operating income of $5.87 billion. This represents a significant improvement from fiscal year 2016, which saw a net loss.
What were the key strategic moves made by Micron in fiscal year 2017?
A major strategic move was the acquisition of the remaining 67% interest in Inotera, enhancing Micron's DRAM capabilities. The company also continued to invest heavily in research and development ($1.82 billion) to advance technologies like 3D NAND and 3D XPoint memory.
What is the outlook for Micron's key product segments based on this filing?
The filing indicates strong demand and growth in the enterprise, mobile, client, and SSD storage markets. Specifically, sales for SSD storage products increased by 137% year-over-year, and the company expects continued growth in its 3D NAND sales. DRAM sales also saw significant increases, driven by demand in compute, networking, graphics, and cloud server markets.
What are the major risks facing Micron, as highlighted in the filing?
Key risks include volatility in average selling prices for semiconductor memory and storage products, intense competition in the highly competitive semiconductor market, potential difficulties in maintaining or improving gross margins, and the significant capital expenditures required for manufacturing technology. Debt obligations and potential disruptions to manufacturing processes are also noted as significant risks.
06—Continue