Shares of Micron (MU, Financial) jumped more than 1% to $59.71 a share in early Wednesday trading after beating consensus on earnings and revenue estimates on third-quarter results.
Micron Technology closed the third trimester of fiscal 2018 with net earnings of $3.15 per share while analysts expected $3.12 per share.
Revenue came in at a 40% year over year growth to $7.8 billion in the third quarter of fiscal 2018 versus a forecast of $7.75 billion.
The gross margin was 61% of net sales. That was 3 percentage points higher than the second quarter of fiscal 2018 and 13 percentage points higher than the same quarter of fiscal 2017.
The segment of DRAM Memory components and modules contributed to the company’s total revenue with 71% and its revenue grew 6% compared to the prior-quarter and increased by 56% from the prior-year quarter.
The company also makes NAND, which contributed 25% to quarterly revenue. Revenue from the segment grew 8% from the second quarter of fiscal 2018 and increased by 14% on a year over year basis.
The company reported that, compared to the previous quarter, shipment volumes were somewhat flat and ASPs were “up mid-to-upper single-digit percent range.”.
Other relevant key metrics on the third trimester of fiscal 2018 indicate that from its operations, Micron Technology generated a cash flow of $4.3 billion and that, after having used funds of $2.2 billion as capital expenditures, the free cash flow was $2.2 billion. For the entire year of 2018, Micron Technology expects to spend about $8 billion for the maintenance and improvement of its fixed assets.
The company closed the balance sheet with approximately $7.7 billion in cash on hand and securities. While the total debt amounts to $7.3 billion.
The company has cut its debt position with $2 billion and expects to achieve another $2 billion debt curtailment in the fourth quarter of fiscal 2018.
For the last quarter of fiscal 2018, Micron Technology predicts revenue to come in at $8 billion to $8.4 billion range for a 59% to 62% gross margin range, operating expenses to average $750 million and net earnings to be approximately $3.3 per diluted share. Consensus is for a net profit of $3.23 per share on a quarterly revenue of $8.08 billion.
For the 52 weeks through June 20, the stock in Micron Technology has climbed 85% to $58.95 per share.
The stock has a market capitalization of $68.37 billion.
The 52-week range is $26.85 to $64.66 per share.
For Micron, analysts’ average target price per share is $77.72, which represents a nearly 32% upside from the current market value. The recommendation rating is 2 out of 5.
Disclosure: I have no position in Micron Technology.
