Key Takeaways From Micron’s 3Q’18 Results

by Trefis Team
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Micron Technology (NYSE:MU), the Idaho-based semiconductor company, reported a remarkable 3Q’18 financial performance backed by its focus on high-value solutions and continued demand for its memory chips. The company has had a good year so far, as emerging technologies such as cloud computing, big data, and artificial intelligence continue to drive the company’s top line as well as earnings. We expect that robust industry demand, coupled with its innovation and excellent execution, will enable Micron to deliver a stellar fiscal 2018. Below, we present Micron’s valuation based on its P/E Multiple using our interactive dashboard.

Key Highlights of Micron’s 3Q’18 Earnings

  • Micron’s 3Q’18 revenue rose to $7.8 billion, 40% higher compared to the same quarter of 2017. This sharp jump in the top line was driven by the company’s efforts to focus on providing high-value solutions such as Managed NAND and low-power DRAM products for the mobile market and SSDs for the cloud market. In addition, the strong demand for memory and storage products further augmented the company’s sales during the quarter.
  • The company’s gross profit grew 81% to $4.72 billion in the quarter, backed by higher volumes, reduction in cost-per-bit, and an improving mix of specialty DRAM and higher-end NAND chips.
  • Micron’s earned a net profit of $3.82 billion, or $3.10 per share, in the third quarter, more than double of what it earned a year ago. Strong top-line growth, focus on high-value solutions, and excellent execution and innovation allowed the company to deliver this remarkable performance.
  • Further, the company announced a share repurchase program of up to $10 billion starting fiscal 2019. This indicates that Micron is committed toward sharing its growth with its shareholders and enhancing their investment value.

Going Forward

As the demand for memory and storage content continues to grow, Micron is strategically broadening its mobile portfolio to offer high-value solutions that will strengthen its relationship with its customers and boost its profitability in the long term. Some of the products that the company plans to launch this year include 1Y nanometer low-power DDR4 memory, new 64-layer TLC UFS, and eMCP Managed NAND solutions. For 4Q’18, the company expects its revenues to be in the range of $8.0-$8.4 billion, a gross margin in the range of 59%-62%, and earnings to be between $3.23 and $3.37 per share.

Do not agree with our forecast? Create your own price forecast for Micron Technology by changing the base inputs (blue dots) on our interactive platform.

 

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