Stock Update (NASDAQ:MU): Micron Technology, Inc. Reports Fiscal 2016 Third Quarter Results


Micron Technology, Inc. (NASDAQ:MU) announced results of operations for its third quarter of fiscal 2016, which ended June 2, 2016. Revenues for the third quarter of fiscal 2016 were $2.90 billion and were slightly lower compared to the second quarter of fiscal 2016 and 25 percent lower compared to the third quarter of fiscal 2015. Cash flows from operations were $389 million for the third quarter of fiscal 2016.

GAAP Income and Per Share Data — On a GAAP(1) basis, net loss attributable to Micron shareholders for the third quarter of fiscal 2016 was $215 million, or ($0.21) per diluted share, compared to net loss of $97 million, or ($0.09) per diluted share, for the second quarter of fiscal 2016.

Non-GAAP Income and Per Share Data — On a non-GAAP(2) basis, net loss attributable to Micron shareholders for the third quarter of fiscal 2016 was $79 million, or ($0.08) per diluted share, compared to net loss of $48 million, or ($0.05) per diluted share, for the second quarter of fiscal 2016. For a reconciliation of GAAP to non-GAAP results, see the accompanying financial tables and footnotes.

“Although we have made good progress in deploying our advanced DRAM and NAND technologies, we continue to face challenging market conditions,” said Micron CEO Mark Durcan. “To address the current market environment and strengthen our competitive position, we are implementing a number of initiatives to reduce costs, drive greater efficiencies, and increase focus on our strategic priorities.”

The initiatives, which include a global workforce reduction, are expected to save the company over $300 million in fiscal 2017.

Revenues for the third quarter of fiscal 2016 were slightly lower compared to the second quarter of fiscal 2016 as increases in sales of DRAM products were offset by decreases in sales of trade Non-Volatile products. DRAM revenues increased in the third quarter of fiscal 2016 as a result of a 22 percent increase in unit sales partially offset by an 11 percent decline in average selling prices. Sales of trade Non-Volatile products decreased due to a 10 percent decrease in units sales and a six percent decline in average selling prices. The company’s overall consolidated gross margin of 17 percent for the third quarter of fiscal 2016 was three percent lower compared to the second quarter primarily due to lower average selling prices partially offset by manufacturing cost reductions.

Investments in capital expenditures for the third quarter of fiscal 2016 were $1.69 billion. The company ended the third quarter of fiscal 2016 with cash and marketable investments of $5.65 billion. (Original Source)

Shares of Micron are falling nearly 8% to $12.60 in pre-market trading. MU has a 1-year high of $20.57 and a 1-year low of $9.31. The stock’s 50-day moving average is $11.90 and its 200-day moving average is $11.54.

On the ratings front, Micron has been the subject of a number of recent research reports. In a report released yesterday, J.P. Morgan analyst Harlan Sur maintained a Buy rating on MU, with a price target of $15, which implies an upside of 12.4% from current levels. Separately, on June 27, Credit Suisse’s John Pitzer reiterated a Buy rating on the stock and has a price target of $20.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Harlan Sur and John Pitzer have a total average return of 1.5% and 10.7% respectively. Sur has a success rate of 50.8% and is ranked #1534 out of 3990 analysts, while Pitzer has a success rate of 65.4% and is ranked #154.

The street is mostly Bullish on MU stock. Out of 24 analysts who cover the stock, 18 suggest a Buy rating , 4 suggest a Hold and 2 recommend to Sell the stock. The 12-month average price target assigned to the stock is $14.90, which represents a potential upside of 11.7% from where the stock is currently trading.

Micron Technology, Inc. provides semiconductor solutions. It manufactures and distributes semiconductor solutions. It manufactures and markets DRAM, NAND Flash and NOR Flash memory, as well as other memory technologies, packaging solutions and semiconductor systems for use in computing, consumer, networking, automotive, industrial, embedded and mobile products. The company operates through four segments: Compute and Networking Business Unit (CNBU), Mobile Business Unit (MBU), Storage Business Unit (SBU), and Embedded Business Unit (EBU).