01—Abstract
Summary
Summary of the 10-Q filed January 6, 2022. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported strong financial results for the first quarter of fiscal year 2022, ending December 2, 2021.
Revenue reached $7.69 billiona, a significant increase of 33% year-over-year, driven by robust demand and increased average selling prices for both DRAM and NAND products. Net income also saw a substantial jump to $2.31 billion, or $2.04 per diluted share, compared to $803 million, or $0.71 per diluted share, in the prior year's quarter. The company demonstrated improved operational efficiency, with gross margins expanding significantly to 46% from 30% in the prior year's quarter, attributed to higher average selling prices and cost reductions.
While revenue saw a slight sequential decrease of 7%b from the previous quarter, this was attributed to customer component shortages and a mid-single-digit decline in average selling prices for NAND. Despite this, Micron's strategic focus on technology leadership, including 176-layer NAND and 1α DRAM, and its disciplined capital allocation, including share repurchases and dividends, position it well for continued growth in the dynamic memory and storage markets.
02—Key points
Key Highlights
- Revenue increased by 33% year-over-year to $7.69 billion, demonstrating strong market demand.
- Net income surged to $2.31 billion, resulting in diluted EPS of $2.04, a significant improvement from the prior year.
- Gross margin improved substantially to 46% from 30% year-over-year, reflecting higher ASPs and cost efficiencies.
- DRAM revenue grew 38% and NAND revenue grew 19% year-over-year, highlighting strength in core product segments.
- The company announced significant capital expenditure plans for 2022, ranging from $11 billion to $12 billion, focused on next-generation technologies.
- Micron repurchased $259 million of common stock and declared a quarterly dividend of $0.10 per share, indicating a commitment to returning value to shareholders.
- The company continues to invest in technology leadership, having introduced industry-leading 176-layer NAND and 1α DRAM.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2022, Micron Technology Inc kept $0.29.
- Revenue$7.79B100.0%
- Cost of revenue−$4.11B52.8%
- Gross profit$3.68B47.2%
- Operating costs−$1.13B14.5%
- Operating income$2.55B32.7%
- Interest, other & tax−$283.0M3.6%
- Net income$2.26B29.1%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2022filed January 6, 2022Financial Statements
Q2 FY2022 against Q2 FY2021
| Line item | Q2 FY2022Q2 FY2021 | Change |
|---|---|---|
| Revenue | $7.79B$6.24B | +24.9% |
| Cost of Revenue | $4.11B$4.59B | −10.4% |
| Gross Profit | $3.68B$1.65B | +122.9% |
| R&D Expenses | $792.00M$641.00M | +23.6% |
| SG&A Expenses | $263.00M$214.00M | +22.9% |
| Operating Income | $2.55B$663.00M | +284.0% |
| Interest Expense | $55.00M$42.00M | +31.0% |
| Net Income | $2.26B$603.00M | +275.3% |
| EPS (Basic) | $2.02$0.54 | +274.1% |
| EPS (Diluted) | $2.00$0.53 | +277.4% |
| Shares Outstanding (Basic) | 1.12B1.12B | −0.1% |
| Shares Outstanding (Diluted) | 1.13B1.14B | −1.2% |
05—Questions
Frequently Asked Questions
How did Micron's revenue and profitability perform in the first quarter of fiscal year 2022 compared to the same period last year?
Micron's revenue increased significantly by 33% year-over-year to $7.69 billion, driven by strong demand and higher average selling prices for DRAM and NAND products. Net income more than doubled to $2.31 billion, resulting in diluted earnings per share of $2.04, up from $0.71 in the prior year's quarter. Gross margins also saw a substantial improvement, reaching 46% compared to 30% in the same period last year.
What are the key drivers behind Micron's revenue growth and improved profitability?
The primary drivers for Micron's performance include strong demand across various market segments, particularly for DRAM and NAND products. The company's ability to increase average selling prices (ASPs) and implement cost reduction measures through advanced technologies like 176-layer NAND and 1α DRAM have significantly contributed to improved gross margins.
What is Micron's outlook on capital expenditures and shareholder returns?
Micron plans to invest heavily in capital expenditures for fiscal year 2022, estimating between $11 billion and $12 billion, to support the transition to advanced technologies and future growth. The company also demonstrated its commitment to shareholder returns by repurchasing $259 million of common stock and declaring a quarterly dividend of $0.10 per share.
Are there any significant risks or headwinds that investors should be aware of?
Key risks highlighted in the filing include the ongoing volatility in average selling prices for semiconductor memory and storage products, intense industry competition, potential disruptions in the global supply chain (exacerbated by factors like COVID-19), and ongoing legal proceedings, particularly those related to intellectual property and antitrust matters. The company also faces risks associated with geopolitical tensions and trade policies.
06—Continue