Micron Technology Conference Call

Shares of Micron Technology MU are trading up over four percent following its third quarter earnings release on Tuesday. Below are some highlights and key takeaways from its conference call: Growth and Operations: • We had another outstanding quarter, benefiting from strong market demand as well as solid operational execution. • Our revenue was just under $4 billion, while gross margins were stable at 34%. • We had very strong free cash flow at $880 million based on operating cash flow of $1.46 billion less CapEx of $576 million. • For the third quarter, we reported net income of $806 million or $0.68 per diluted share. • Restructure charges in the quarter of $9 million were primarily related to idle charges associated with shutting down operations in Israel and Italy Key Areas of Focus: • Completion of the planned 25-nanometer DRAM conversion • Beginning the 20-nanometer DRAM ramp, this is critical to improving our relative cost position; • Active management of our DRAM product mix, as we balance servicing demand growth in categories such as server and mobile, while also maximizing our margin profile across other long-term strategically important segments; • Continued execution of our ongoing and capital efficient 16-nanometer planar NAND conversion; • Investment in tools and engineering resources to support the initial deployment and ramp of our innovative 3D NAND technology; • Increase sales of 16-nanometer TLC NAND-based products; • Growth of our robust enterprise SSD product portfolio; • Continued development of our capability to deliver higher value system-level solutions, including investments in advanced packaging and controllers; • Investment in newly emerging memory technologies to ensure we remain at the cutting edge of innovation. • As you can tell, we do not plan to rest on our laurels. • For 2015 as well as for the longer term, we will continue to be measured and prudent in our capital spending. • Maintain flexibility to regulate capital expenditures based on the return profile of the investment, including of course the impact of any change in market conditions. Outlook: • Our long-term outlook for memory industry conditions also remains favorable. • The supplier base is consolidated in DRAM and stabilized in NAND, and we believe that in both markets the industry is at a stage of maturity such that each supplier has sufficient scale to compete. • On a consolidated basis, we're guiding total revenue for the fourth quarter in the range of $4 billion to $4.2 billion. • Fourth quarter gross margins are expected to be adversely affected in the $30 million range by a last-time sale of end-of-life legacy architecture projects not included in our DRAM and NAND guidance that I just went through. • The company generated $1.5 billion in operating cash flow in the third quarter and ended the quarter with $4.8 billion in cash and marketable investments, including $2.6 billion held by Elpida and its subsidiaries. • Over $1 billion of expenditures planned for Q4.