01—Abstract
Summary
Summary of the 10-Q filed December 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Micron Technology, Inc. reported a net loss of $195 milliona ($0.18 per diluted share) for the first quarter of fiscal year 2023, a significant downturn compared to the $2,306 million net income ($2.04 per diluted share) in the same period last year.
This decline is primarily attributed to a sharp decrease in revenue, down 47% year-over-year to $4,085 millionb, driven by falling average selling prices and reduced bit shipments for both DRAM and NAND products. The company is experiencing a challenging industry environment characterized by global macroeconomic issues and customer inventory adjustments, leading to reduced demand and pricing pressures. In response to these market conditions, Micron is implementing cost-reduction measures, including workforce reductions, and has decreased wafer starts and capital expenditures.
Despite the current headwinds, the company is continuing its strategic investments in new fabrication facilities in the U.S. to support long-term demand. The company ended the quarter with a strong cash and investments balance of $12.01 billionc, providing liquidity to navigate the current market downturn.
02—Key points
Key Highlights
- Revenue declined sharply by 47% year-over-year to $4,085 million, signaling a significant market downturn.
- The company reported a net loss of $195 million, a substantial reversal from a net income of $2,306 million in the prior year's quarter.
- Both DRAM and NAND product sales saw significant year-over-year decreases due to falling average selling prices and reduced bit shipments.
- Gross margin compressed significantly to 22% from 46% year-over-year, reflecting the challenging pricing environment.
- Micron is undertaking cost-saving initiatives, including a 10% workforce reduction and reduced wafer starts/capital expenditures.
- The company ended the quarter with $12.01 billion in cash and marketable investments, indicating strong liquidity.
- Significant long-term investments in new U.S. fabrication facilities for future capacity expansion are ongoing.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2023, Micron Technology Inc lost $0.63.
- Revenue$3.69B100.0%
- Cost of revenue−$4.90B132.7%
- Gross profit−$1.21B32.7%
- Operating costs−$1.10B29.7%
- Operating income−$2.30B62.4%
- Interest, other & tax−$9.0M0.2%
- Net income−$2.31B62.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2023filed December 22, 2022Financial Statements
Q2 FY2023 against Q2 FY2022
| Line item | Q2 FY2023Q2 FY2022 | Change |
|---|---|---|
| Revenue | $3.69B$7.79B | −52.6% |
| Cost of Revenue | $4.90B$4.11B | +19.2% |
| Gross Profit | -$1.21B$3.68B | −132.8% |
| R&D Expenses | $788.00M$792.00M | −0.5% |
| SG&A Expenses | $231.00M$263.00M | −12.2% |
| Operating Income | -$2.30B$2.55B | −190.5% |
| Interest Expense | $89.00M$55.00M | +61.8% |
| Net Income | -$2.31B$2.26B | −202.2% |
| EPS (Basic) | $-2.12$2.02 | −205.0% |
| EPS (Diluted) | $-2.12$2.00 | −206.0% |
| Shares Outstanding (Basic) | 1.09B1.12B | −2.5% |
| Shares Outstanding (Diluted) | 1.09B1.13B | −3.5% |
05—Questions
Frequently Asked Questions
What is the primary driver behind Micron's significant revenue decline?
The primary driver behind Micron's revenue decline is the challenging industry environment characterized by global macroeconomic factors, customer inventory adjustments, and weak demand in several end markets. This has led to substantial reductions in both average selling prices (ASPs) and bit shipments for both DRAM and NAND products.
What steps is Micron taking to address the current market downturn?
Micron is implementing several cost-saving and efficiency measures, including reducing wafer starts and capital expenditures. They are also undertaking a restructure plan to reduce headcount by approximately 10%, cutting external spending, implementing productivity programs, suspending the 2023 bonus, and reducing discretionary spending and executive salaries.
How is Micron positioning itself for future growth despite current challenges?
Despite the current market conditions, Micron continues to invest in its long-term strategy. This includes significant capital expenditures for new leading-edge memory manufacturing facilities in the United States (Boise, Idaho, and Clay, New York) to support future memory demand and leverage support from the U.S. CHIPS and Science Act.
What is the company's liquidity position?
Micron maintains a strong liquidity position, with cash and marketable investments totaling $12.01 billion as of December 1, 2022. This provides the company with financial flexibility to navigate the current downturn and fund its ongoing operations and strategic investments.
06—Continue