01—Abstract
Summary
Summary of the 10-Q filed April 8, 2013. Cited figures are marked; the original filing is the authoritative source.
Micron Technology Inc. reported a net loss of $286 milliona for the second quarter of fiscal year 2013, a slight increase from the $282 million loss in the same period of the prior year.
While net sales saw a modest increase year-over-year, gross margins improved significantly, reflecting cost reduction efforts. However, substantial losses in "other operating (income) expense, net" and "other non-operating income (expense), net" negatively impacted the bottom line. These included a $62 millionb impairment loss related to the sale of its Italian subsidiary and significant losses on currency hedges associated with the pending Elpida acquisition.
The company provided an update on its proposed acquisition of Elpida Memory, Inc., noting that creditor approval had been obtained and the Japan Court had approved the reorganization plan, though appeals were filed by certain creditors. The transaction remains subject to further conditions, including U.S. court recognition.
Management continues to believe the acquisition will be consummated. The company also continues to manage its liquidity, with net cash provided by operating activities at $470 millionc for the first six months of fiscal year 2013, supported by robust cash and investments.
02—Key points
Key Highlights
- Net loss of $286 million for the quarter, compared to a $282 million net loss in the prior year's second quarter.
- Net sales increased to $2.078 billion from $2.009 billion year-over-year, driven by improvements in the DRAM Solutions Group (DSG).
- Gross margin improved significantly to 18% from 10% year-over-year due to cost reductions.
- The company incurred a $62 million impairment loss related to the planned sale of its Italian subsidiary (MIT).
- Substantial losses on currency hedges ($114 million in the quarter) were recorded due to the pending Elpida acquisition.
- The acquisition of Elpida Memory, Inc. is progressing, with creditor approval and Japanese court approval, though facing appeals.
- Operating cash flow remained strong at $470 million for the first six months of the fiscal year.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2013, Micron Technology Inc lost $0.14.
- Revenue$2.08B100.0%
- Cost of revenue−$1.71B82.4%
- Gross profit$366.0M17.6%
- Operating costs−$389.0M18.7%
- Operating income−$23.0M1.1%
- Interest, other & tax−$263.0M12.7%
- Net income−$286.0M13.8%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2013filed April 8, 2013Financial Statements
Q2 FY2013 against Q2 FY2012
| Line item | Q2 FY2013Q2 FY2012 | Change |
|---|---|---|
| Revenue | $2.08B$2.01B | +3.4% |
| Cost of Revenue | $1.71B$1.80B | −4.8% |
| Gross Profit | $366.00M$210.00M | +74.3% |
| R&D Expenses | $214.00M$222.00M | −3.6% |
| SG&A Expenses | $123.00M$174.00M | −29.3% |
| Operating Income | -$23.00M-$204.00M | +88.7% |
| Interest Expense | $56.00M$35.00M | +60.0% |
| Net Income | -$286.00M-$282.00M | −1.4% |
| EPS (Basic) | $-0.28$-0.29 | +3.4% |
| EPS (Diluted) | $-0.28$-0.29 | +3.4% |
| Shares Outstanding (Basic) | 1.02B982.80M | +3.4% |
| Shares Outstanding (Diluted) | 1.02B982.80M | +3.4% |
05—Questions
Frequently Asked Questions
What was Micron's net income/loss for the quarter and how does it compare to the previous year?
Micron reported a net loss of $286 million for the second quarter of fiscal year 2013, which is slightly higher than the net loss of $282 million reported in the same quarter of fiscal year 2012.
How did the company's sales and gross margin perform?
Net sales increased to $2.078 billion in the current quarter from $2.009 billion in the prior year's quarter. Gross margin improved significantly to 18% from 10% year-over-year, indicating successful cost reduction efforts.
What are the key factors impacting the company's profitability beyond core operations?
The company experienced significant negative impacts from "other" expenses. This includes a $62 million impairment loss on assets held for sale related to the Italian subsidiary divestiture and substantial losses of $114 million on currency hedges, primarily related to the ongoing acquisition of Elpida.
What is the status of the Elpida acquisition?
The acquisition of Elpida Memory, Inc. is progressing, with creditors approving the reorganization plan and the Japan Court granting its approval. However, certain creditors have filed appeals, and the transaction is still subject to further conditions, including U.S. court recognition. Micron management remains optimistic about the acquisition's eventual completion.
06—Continue