Micron Technology Earnings: Fifth Straight Quarter of Shrinking Margins

S&P 500 (NYSE:SPY) component Micron Technology Inc. (NASDAQ:MU) reported its results for the fourth quarter. Micron Technology is a global manufacturer and marketer of Flash memory, image sensors and other semiconductor components.

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Micron Technology Inc. Earnings Cheat Sheet

Results: Loss widened to $243 million (24 cents per diluted share) from $135 million (loss of 14 cents per share) in the same quarter a year earlier.

Revenue: Fell 8.3% to $1.96 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Micron Technology Inc. fell short of the mean analyst estimate of a loss of 21 cents per share. Analysts were expecting revenue of $2 billion.

Quoting Management: “In 2012, despite difficult market conditions and lower average selling prices, we continued to execute on our technology and manufacturing roadmaps and moved our products increasingly into premium segments. Our focus throughout 2013 is to drive additional cost reductions and advance our leading-edge memory technology to achieve increased manufacturing efficiencies,” said Micron CEO Mark Durcan.

Key Stats:

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 3.8 percentage points from the year-earlier quarter to 11.2%. In that span, margins have contracted an average of 9.8 percentage points per quarter on a year-over-year basis.

The company has missed analyst estiamtes for four quarters in a row. It fell short by 13 cents in the third quarter, by 7 cents in the second quarter, and by 11 cents in the first quarter.

Over the last five quarters, revenue has fallen an average of 7.8% year-over-year. The biggest drop came in the fourth quarter of the last fiscal year, when revenue fell 14.2% from the year-earlier quarter.

Looking Forward: For the next quarter, analysts are growing pessimistic about the company’s expected results. The average estimate for the first quarter of the next fiscal year is now a loss of 5 cents per share, down from a profit of 11 cents ninety days ago. For the fiscal year, the average estimate has moved from a loss of 58 cents a share to a loss of $1.01 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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