Market Overview

Micron Technology Conference Call Highlights

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Shares of Micron Technology (NASDAQ: MU) closed Tuesday up 3.97 percent following its third quarter earnings release.

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.
• 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.

Posted-In: Earnings News Guidance


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