In an age when consumers are becoming tech savvy and are mad for consumer electronics products, Micron (MU, Financial) has been working on its chips to gain quick market share. And it has seen a tremendous success as a renowned chipmaker. However, when it posted its first quarter results of fiscal 2015 after the bell on Jan. 6, it did send a word of caution to its investors, and analysts were a bit depressed with the mixed earnings report. As expectations on chipmaker Micron had been lofty for the first quarter, the numbers did fall shy of the predictions by Wall Street analysts. Let’s quickly take a peek into what were the major highlights of the first quarter.
The mixed quarter numbers
Micron Technology Inc. reported revenue of $4.57 billion in the first quarter, up from $4.04 billion reported a year ago, but it missed the Street projections that stood at $4.62 billion. Adjusted came in at $0.97 per share, equivalent to $1.14 billion, outpacing the Wall Street’s projection of $0.93 per share.
CEO Mark Durcan said during the earnings call – “Micron’s execution and continued favorable market conditions led to a strong first quarter with record revenues and operating cash flows…”
The company reported $1.59 billion in cash flow from operating activities, up from $1.51 billion a year ago. Gross margins also improved three percentage points to 36%. As demand for chips has been growing, with semiconductor sales rising 7.9% to bring in $340 billion last year, according to Gartner the chipmaker has been benefitted in the long run.
Investments in capital expenditure were $669 million for the first quarter, and Micron ended the quarter with cash and marketable investments worth $5.31 billion.
Acquisition serves as a boost to DRAM technology
Micron is now a giant in DRAM after the acquisition of Elpida Memory in July 2013. The acquisition has led to an improvement in DRAM revenue which rose 9% compared to the fourth quarter primarily being driven by increase in bit sales volume and stable average selling prices. It also led to improvement of gross margins for DRAM which increased a couple of percentage points into the low 40% range.
Repurchase program continues
During the first quarter, the Board announced the repurchase up to $1 billion of our common stock. Any repurchases under the authorization would be performed opportunistically in open trading windows.Ă‚
Final note
The management has projected that the quarter was an exceptional one and the company is well positioned for continued success in the diversifying memory business. As we enter into this fiscal year, Micron which has shown a growth trajectory in 2014 is slated to see better days as a semiconductor company.
