Summary
Micron Technology Inc. (MU) reported its fiscal second quarter and first six months ended March 3, 2016. The company experienced a significant decline in net sales, down 30% year-over-year for the quarter and 28% for the six-month period, largely driven by decreased average selling prices (ASPs) and lower sales volumes in its Compute and Networking (CNBU) and Mobile Business Unit (MBU) segments. Consequently, gross margins also decreased significantly, with the company reporting an operating loss for the quarter. Despite these challenges, Micron is progressing with strategic initiatives, including the pending acquisition of the remaining interest in Inotera for approximately $4.0 billion, which is expected to close in the fourth quarter of 2016. Financially, the company ended the period with a healthy cash and equivalents balance, though total debt increased. Micron generated $1.88 billion in cash from operating activities for the first six months of the year. Capital expenditures remain a significant focus, with an estimated $5 billion planned for the full year. Investors should closely monitor ASP trends, the successful integration of Inotera, and the company's ability to manage costs amidst challenging market conditions.
Financial Highlights
52 data points| Revenue | $2.90B |
| Cost of Revenue | $2.40B |
| Gross Profit | $498.00M |
| R&D Expenses | $382.00M |
| SG&A Expenses | $148.00M |
| Operating Income | -$27.00M |
| Interest Expense | $109.00M |
| Net Income | -$215.00M |
| EPS (Basic) | $-0.21 |
| EPS (Diluted) | $-0.21 |
| Shares Outstanding (Basic) | 1.04B |
| Shares Outstanding (Diluted) | 1.04B |
Key Highlights
- 1Net sales for the second quarter of 2016 decreased by 30% to $2.93 billion compared to $4.17 billion in the prior year's second quarter.
- 2The company reported an operating loss of $5 million for the second quarter of 2016, a significant decline from an operating income of $855 million in the same period last year.
- 3Net income attributable to Micron was a loss of $97 million for the second quarter of 2016, compared to a net income of $934 million in the prior year.
- 4Micron is in the process of acquiring the remaining interest in Inotera for approximately $4.0 billion, with an expected closing in the fourth quarter of 2016.
- 5The company's gross margin declined to 20% in the second quarter of 2016 from 34% in the prior year's second quarter, primarily due to lower average selling prices.
- 6Cash and cash equivalents remained strong at $3.08 billion as of March 3, 2016.
- 7Capital expenditures are estimated to be approximately $5 billion for the full fiscal year 2016.