Micron Technology Earnings: Margins Shrink as Net Income Falls Short of View

S&P 500 (NYSE:SPY) component Micron Technology Inc. (NASDAQ:MU) reported a drop to a loss in the third quarter driven by higher costs. 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: Reported a loss of $320 million (32 cents per diluted share) in the quarter. Micron Technology Inc. had a net income of $75 million or 7 cents per share in the year-earlier quarter.

Revenue: Rose 1.5% to $2.17 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 19 cents per share. It beat the average revenue estimate of $2 billion.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins, as gross margin fell 11.6 percentage points to 10.8% from the year-earlier quarter. Over that time, margins have contracted on average 12 percentage points per quarter on a year-over-year basis.

A year-over-year revenue increase last quarter snaps a streak of four consecutive quarters of revenue declines. The worst quarter in that span was the fourth quarter of the last fiscal year, which saw a 14.2% decrease.

The company has now missed analyst estimates for the last four quarters. It fell short by 7 cents in the second quarter, by 11 cents in the first quarter, and by 14 cents in the fourth quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from a profit of 10 cents a share to a loss of 2 cents over the last ninety days. For the fiscal year, the average estimate has moved from a loss of 29 cents a share to a loss of 66 cents over the last ninety days.

Competitors to Watch: Intel Corporation, Spansion Inc., SanDisk Corporation, Integrated Silicon Solution, Inc., SMART Modular Tech. (WWH), Inc., MoSys Inc., LOGIC Devices Incorporated, Netlist, Inc., GSI Technology, Inc., and Integrated Device Tech., Inc.

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

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