Summary
Micron Technology Inc. reported net sales of $2.257 billion for the second quarter of fiscal year 2011, a 15% increase compared to the same period in the prior year. However, net income attributable to Micron decreased significantly, falling from $365 million in Q2 2010 to $72 million in Q2 2011, resulting in diluted earnings per share of $0.07 compared to $0.39 in the prior year. This decline in profitability was primarily driven by a substantial decrease in average selling prices (ASPs) for DRAM products, which declined by 37% year-over-year, impacting gross margins. The company saw strong growth in its Wireless Solutions Group (WSG) and Embedded Solutions Group (ESG) segments, largely attributed to the acquisition of Numonyx in May 2010. However, the DRAM Solutions Group (DSG) experienced a significant sales decline due to falling ASPs, despite an increase in gigabits sold. Micron continues to invest heavily in capital expenditures, with expected spending between $2.6 billion and $2.9 billion for fiscal year 2011, signaling a focus on future growth and technology development amidst a challenging pricing environment.
Financial Highlights
51 data points| Revenue | $2.14B |
| Cost of Revenue | $1.66B |
| Gross Profit | $478.00M |
| R&D Expenses | $211.00M |
| SG&A Expenses | $151.00M |
| Operating Income | $237.00M |
| Interest Expense | $28.00M |
| Net Income | $75.00M |
| EPS (Basic) | $0.07 |
| EPS (Diluted) | $0.07 |
| Shares Outstanding (Basic) | 998.90M |
| Shares Outstanding (Diluted) | 1.04B |
Key Highlights
- 1Net sales increased by 15% year-over-year to $2.257 billion, driven by growth in WSG and ESG segments, partly due to the Numonyx acquisition.
- 2Net income attributable to Micron decreased sharply by 80% year-over-year to $72 million, leading to a diluted EPS of $0.07 compared to $0.39 in the prior year.
- 3Gross margin declined significantly from 33% in Q2 2010 to 19% in Q2 2011, primarily due to a 37% drop in DRAM average selling prices.
- 4The company continues aggressive capital investment, with expected capital expenditures for fiscal year 2011 in the range of $2.6 billion to $2.9 billion.
- 5Cash and equivalents decreased to $2.184 billion from $2.913 billion at the end of the previous fiscal year, reflecting significant investing and financing activities.
- 6Micron is actively managing its debt, having completed several debt restructure transactions in the previous quarter, including debt exchanges and repurchases.