Summary
Micron Technology Inc. reported a significant decrease in revenue and profitability for the fiscal third quarter ending May 30, 2019, compared to the same period in the prior year. Revenue declined by 39% year-over-year to $4.79 billion, primarily driven by widespread price declines in both DRAM and NAND markets due to an industry-wide supply and demand imbalance. This challenging market environment also led to a substantial reduction in gross margin to 38% from 61% in the prior year's quarter. Despite these headwinds, Micron continued to invest heavily in research and development and capital expenditures, signaling a commitment to future technological advancements. The company also actively managed its balance sheet, undertaking significant share repurchases while also facing ongoing legal and regulatory scrutiny. Investors should monitor pricing trends in the memory market, the impact of ongoing trade tensions (particularly concerning Huawei), and the company's execution on its strategic investments in technology and capacity.
Financial Highlights
51 data points| Revenue | $4.79B |
| Cost of Revenue | $2.96B |
| Gross Profit | $1.83B |
| R&D Expenses | $606.00M |
| SG&A Expenses | $206.00M |
| Operating Income | $1.01B |
| Interest Expense | $29.00M |
| Net Income | $840.00M |
| EPS (Basic) | $0.76 |
| EPS (Diluted) | $0.74 |
| Shares Outstanding (Basic) | 1.10B |
| Shares Outstanding (Diluted) | 1.13B |
Key Highlights
- 1Revenue for the third quarter of fiscal 2019 decreased by 39% to $4.79 billion compared to the same period in fiscal 2018.
- 2Gross margin significantly declined to 38% in Q3 FY19 from 61% in Q3 FY18, driven by falling average selling prices.
- 3Operating income decreased by 74% to $1.01 billion in Q3 FY19 compared to $3.95 billion in Q3 FY18.
- 4The company repurchased approximately $157 million of its common stock during the third quarter of fiscal 2019.
- 5Capital expenditures for the nine months ended May 30, 2019, were $7.75 billion, reflecting significant investment in property, plant, and equipment.
- 6The company experienced an 18% sequential revenue decrease from Q2 FY19 to Q3 FY19, attributed to broad industry supply and demand imbalances impacting pricing.
- 7Sales to Huawei accounted for 13% of total revenue for the first nine months of 2019, and shipments were suspended in May 2019 due to US entity list restrictions, though certain products resumed shipment later.