01—Abstract
Summary
Summary of the 10-Q filed March 26, 2020. Cited figures are marked; the original filing is the authoritative source.
Micron Technology Inc. (MU) reported its second quarter fiscal year 2020 results for the period ending February 27, 2020.
The company experienced a significant decline in revenue compared to the prior year, with total revenue decreasing by 18% year-over-year to $4.797 billiona. This decline was primarily driven by lower average selling prices (ASPs) for DRAM products, although NAND product sales saw a modest increase due to higher ASPs and bit shipments. Despite the revenue challenges, gross margin improved slightly quarter-over-quarter to 28%, largely due to better performance in NAND.
However, year-over-year, gross margin contracted significantly from 49%b to 28%. Operating income also saw a substantial decrease, reflecting the challenging market conditions. The company is also navigating the early stages of the COVID-19 pandemic, acknowledging its potential to impact future demand and operations.
02—Key points
Key Highlights
- Revenue for the second quarter of fiscal year 2020 was $4.797 billion, a decrease of 18% compared to $5.835 billion in the second quarter of fiscal year 2019.
- Gross margin improved to 28% compared to 27% in the prior quarter, but significantly declined from 49% in the same quarter last year.
- Operating income for the quarter was $440 million, a sharp decrease from $1.957 billion in the prior year's comparable quarter.
- DRAM revenue decreased by 26% year-over-year, while NAND revenue increased by 9% year-over-year.
- The company adopted ASC 842, the new lease accounting standard, which resulted in the recognition of $567 million in operating lease liabilities and right-of-use assets.
- Micron announced an estimated capital expenditure range of $7 billion to $8 billion for fiscal year 2020.
- The company is actively monitoring the impact of the COVID-19 pandemic and anticipates potential negative impacts on business activity and demand in certain sectors, while noting demand increases in others like server DRAM and NAND.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2020, Micron Technology Inc kept $0.08.
- Revenue$4.80B100.0%
- Cost of revenue−$3.44B71.8%
- Gross profit$1.35B28.2%
- Operating costs−$915.0M19.1%
- Operating income$440.0M9.2%
- Interest, other & tax−$35.0M0.7%
- Net income$405.0M8.4%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2020filed March 26, 2020Financial Statements
Q2 FY2020 against Q2 FY2019
| Line item | Q2 FY2020Q2 FY2019 | Change |
|---|---|---|
| Revenue | $4.80B$5.83B | −17.8% |
| Cost of Revenue | $3.44B$2.97B | +15.9% |
| Gross Profit | $1.35B$2.86B | −52.7% |
| R&D Expenses | $681.00M$601.00M | +13.3% |
| SG&A Expenses | $223.00M$209.00M | +6.7% |
| Operating Income | $440.00M$1.96B | −77.5% |
| Interest Expense | $46.00M$27.00M | +70.4% |
| Net Income | $405.00M$1.62B | −75.0% |
| EPS (Basic) | $0.37$1.45 | −74.5% |
| EPS (Diluted) | $0.36$1.42 | −74.6% |
| Shares Outstanding (Basic) | 1.11B1.11B | −0.3% |
| Shares Outstanding (Diluted) | 1.13B1.14B | −0.7% |
05—Questions
Frequently Asked Questions
What was Micron's revenue performance in the second quarter of fiscal year 2020?
Micron's revenue for the second quarter of fiscal year 2020 was $4.797 billion, representing an 18% decrease compared to $5.835 billion in the same period of fiscal year 2019. This decline was primarily attributed to lower average selling prices for DRAM products.
How did Micron's gross margin perform in this quarter?
The company's gross margin improved to 28% in the second quarter of fiscal year 2020, up from 27% in the prior quarter. However, this is a significant decrease from 49% reported in the comparable quarter of fiscal year 2019, mainly due to declining average selling prices.
What is the company's outlook on the COVID-19 pandemic?
Micron acknowledged that the impact of COVID-19 is currently unknown but anticipates it will negatively impact business activity globally. While certain areas like server DRAM and NAND show demand increases, the company expects declining demand in sectors such as smartphones and automobiles.
What is Micron's capital expenditure plan for fiscal year 2020?
Micron estimates capital expenditures for property, plant, and equipment for fiscal year 2020 to be in the range of $7 billion to $8 billion, with a focus on technology transitions and product enablement.
06—Continue