10-QPeriod: Q2 FY2014

MICRON TECHNOLOGY INC Quarterly Report for Q2 Ended Feb 27, 2014

Filed April 7, 2014For Securities:MU

Summary

Micron Technology, Inc. reported strong financial results for the quarter and six months ended February 27, 2014. Net sales surged to $4.11 billion for the quarter and $8.15 billion for the six-month period, representing significant year-over-year growth. This impressive performance was driven by the successful integration of Elpida Memory, Inc., which boosted DRAM and NAND Flash sales, particularly in the mobile and computing segments. The company also demonstrated a significant turnaround in profitability. Net income attributable to Micron reached $731 million for the quarter, a substantial improvement from a net loss in the prior year period. Diluted earnings per share were $0.61. This profitability increase is a testament to the company's operational efficiency, strategic acquisitions, and the recovery in the semiconductor memory market. Investors should note the strong operational income of $869 million for the quarter, indicating robust underlying business performance.

Financial Highlights

51 data points
Beta

Revenue

$4.11B

34.2% Gross Margin

Net Income

$731.00M

17.8% Net Margin

EPS (Diluted)

$0.61

Total Assets

$20.61B

Cash & Equivalents

$4.30B

Free Cash Flow

$825.00M

Financial Statements
Beta
Revenue$4.11B
Cost of Revenue$2.70B
Gross Profit$1.40B
R&D Expenses$344.00M
SG&A Expenses$177.00M
Operating Income$869.00M
Interest Expense$83.00M
Net Income$731.00M
EPS (Basic)$0.69
EPS (Diluted)$0.61
Shares Outstanding (Basic)1.06B
Shares Outstanding (Diluted)1.20B

Key Highlights

  • 1Net sales for the quarter ended February 27, 2014, were $4,107 million, a significant increase from $2,078 million in the prior year period.
  • 2Net income attributable to Micron was $731 million for the quarter, a substantial improvement from a net loss of $286 million in the same period last year.
  • 3The acquisition of Elpida Memory, Inc. has had a significant positive impact, driving substantial increases in DRAM and NAND Flash sales across key segments.
  • 4Gross margin improved significantly to 34% for the quarter, up from 18% in the prior year quarter, reflecting better pricing and operational efficiencies.
  • 5Operating income for the quarter was $869 million, a dramatic improvement from an operating loss of $23 million in the prior year quarter.
  • 6The company ended the period with a strong cash position of $4,305 million, indicating healthy liquidity.

Frequently Asked Questions

The primary drivers were the successful integration of Elpida Memory, Inc., which significantly boosted DRAM and NAND Flash sales, and an overall recovery in the semiconductor memory market. Improved average selling prices and higher sales volumes across key segments, particularly for DRAM products, also contributed to the strong performance.

The acquisition of Elpida has been a major positive factor. It has substantially increased Micron's DRAM and NAND Flash sales, particularly in the Wireless Solutions Group (WSG) and DRAM Solutions Group (DSG) segments. The acquired operations have contributed significantly to revenue growth and improved the company's overall market position.

While the filing doesn't provide explicit forward-looking statements for future quarters in this specific 10-Q section, the strong performance in this quarter suggests a positive trend. Management anticipates continued capital spending to support growth and technological advancements. However, investors should be aware of the highly competitive nature of the semiconductor memory industry and potential fluctuations in average selling prices.

Micron is involved in ongoing litigation, including patent disputes and antitrust matters. Notably, the company settled all pending litigation with Rambus and entered into a patent cross-license agreement. There are also ongoing proceedings related to the Elpida reorganization and other patent matters, the outcomes of which are uncertain and could potentially impact financial condition, although management states none are expected to have a material adverse effect individually.