A Look At Micron's Revenue Channels

Micron Technology, Inc. MU reported better-than-expected first quarter results, driven by both resilient demand trends and improving DRAM pricing.

Micron reported proforma EPS of $0.32, above Street and guidance of $0.28, and delivered revenue of $3.97 billion, in line with consensus $3.80 billion.

For the February quarter, the company expects EPS of $0.58–$0.68, significantly higher than Street’s $0.36. The company guided revenue of $4.35 billion–$4.70 billion, well above consensus’ $3.83 billion estimate as favorable supply/demand industry dynamics are expected to continue for both DRAM and NAND.

Analyst's Commentary, Rating

“We continue to like MU since it is in the midst of a positive cycle in the DRAM and NAND markets. We believe Industry-wide cuts to DRAM CAPEX in 2016 will deliver a favorable supply demand balance through at least the 1H17,” Brean Capital analyst Mike Burton wrote in a note.

Burton maintains his Buy rating and raised his price target by $3 to $28 on favorable supply/demand dynamics in both DRAM and NAND markets.

Micron posted growth across all its business segments, with the most growth coming from its mobile business unit, which grew over 50 percent sequentially. On a sequential basis, Micron’s compute and networking business unit gained 18 percent, Embedded product group increased 13 percent and storage business unit also rose 13 percent.

Shares of Micron Technology closed Wednesday’s trading at $20.58. In the pre-market hours Thursday, the stock gained 12.2 percent to $23.09, a new 52-week high.