01—Abstract
Summary
Summary of the 10-Q filed April 1, 2021. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported strong revenue growth for the second quarter of fiscal year 2021, with a significant increase of 30% year-over-year, reaching $6.24 billiona.
This growth was primarily driven by robust demand and increased bit shipments across both DRAM and NAND products, particularly in the mobile, server, automotive, and networking markets. Despite the revenue surge, the company experienced a dip in gross margin to 26% from 30% in the prior quarter. This was largely attributed to one-time impacts from adopting the FIFO inventory costing method and changes in inventory cost absorption, resulting in a $293 millionb increase in cost of goods sold.
The company also announced the cessation of development for 3D XPoint technology and the planned sale of its Lehi, Utah facility, which impacted inventory write-downs and operating income. Looking ahead, Micron anticipates continued investment in capital expenditures, estimated at $9 billionc for fiscal year 2021, to support technology transitions and product enablement.
02—Key points
Key Highlights
- Revenue increased by 30% year-over-year to $6.24 billion, driven by strong DRAM and NAND sales.
- Gross margin decreased to 26% due to one-time inventory accounting changes (FIFO adoption) and cost absorption impacts, which increased COGS by $293 million.
- Micron is ceasing development of 3D XPoint technology and plans to sell its Lehi, Utah facility, resulting in a $49 million inventory write-down.
- Capital expenditures are projected to be approximately $9 billion for fiscal year 2021, focusing on technology transitions and product enablement.
- Operating income saw a substantial increase of 49% year-over-year, reaching $663 million, despite the gross margin pressure.
- The Compute and Networking Business Unit (CNBU) and Mobile Business Unit (MBU) showed significant revenue and operating income growth.
- The company ended the quarter with a strong cash and investments balance of $8.50 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2021, Micron Technology Inc kept $0.23.
- Revenue$7.42B100.0%
- Cost of revenue−$4.30B57.9%
- Gross profit$3.13B42.1%
- Operating costs−$1.33B17.9%
- Operating income$1.80B24.2%
- Interest, other & tax−$64.0M0.9%
- Net income$1.74B23.4%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2021filed April 1, 2021Financial Statements
Q3 FY2021 against Q3 FY2020
| Line item | Q3 FY2021Q3 FY2020 | Change |
|---|---|---|
| Revenue | $7.42B$5.44B | +36.5% |
| Cost of Revenue | $4.30B$3.67B | +16.9% |
| Gross Profit | $3.13B$1.76B | +77.3% |
| R&D Expenses | $670.00M$649.00M | +3.2% |
| SG&A Expenses | $230.00M$216.00M | +6.5% |
| Operating Income | $1.80B$888.00M | +102.6% |
| Interest Expense | $46.00M$51.00M | −9.8% |
| Net Income | $1.74B$803.00M | +116.1% |
| EPS (Basic) | $1.55$0.72 | +115.3% |
| EPS (Diluted) | $1.52$0.71 | +114.1% |
| Shares Outstanding (Basic) | 1.12B1.11B | +0.9% |
| Shares Outstanding (Diluted) | 1.15B1.13B | +1.4% |
05—Questions
Frequently Asked Questions
What is the main driver behind Micron's revenue growth in Q2 2021?
Micron's revenue growth was primarily driven by a significant increase in sales of DRAM and NAND products. This was fueled by higher bit shipments across various markets, including mobile, server, automotive, and networking, reflecting strong demand in these sectors.
Why did Micron's gross margin decrease despite the revenue increase?
The decrease in gross margin to 26% was primarily due to one-time impacts from the adoption of the FIFO (First-In, First-Out) inventory costing method and changes in inventory cost absorption processes. These accounting changes resulted in a $293 million increase in the cost of goods sold during the quarter.
What is the impact of the cessation of 3D XPoint development?
Micron has ceased development of 3D XPoint technology and plans to sell its dedicated facility in Lehi, Utah. This decision led to a $49 million charge to cost of goods sold for inventory write-down and the classification of related property, plant, and equipment as held-for-sale. The company expects this move to align its portfolio with data center market innovations.
What are Micron's capital expenditure plans?
Micron estimates capital expenditures for fiscal year 2021 to be approximately $9 billion. These investments are primarily focused on technology transitions and product enablement to maintain its competitive position and support future growth.
06—Continue