Micron Q1 Earnings Barely Beat Estimates

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Micron Technology reported a first-quarter net revenue of $7.69 billion, up 33 percent compared to a year ago and slightly above Wall Street estimates of $7.68 billion. The chipmaker also reported a quarterly profit of $2.16 per share, above its expectations of $2.10 and exceeding analyst estimates of $0.05.

Micron stock (NASDAQ: MU) rose to 6.3 percent in late trading following its Q1 earnings report. The stock rose again to 8.7 percent in pre-market trading. The chipmaker also reported operating cash flow of $3.94 billion compared to $3.88 billion last quarter and $1.97 billion last year.

Though Micron’s revenue increased year-to-year, its earnings are down 7 percent compared to last quarters’ revenue of $8.27 billion. Micron’s president and CEO Sanjay Mehrotra offered positive remarks in regard to the chipmaker’s Q2 expectations.

“Our strong start to the year and our product portfolio momentum keep us on track to deliver record revenue and robust profitability in fiscal 2022,” Mehrotra said. “We are rapidly ramping our industry-leading 1-alpha DRAM and 176-layer NAND products and achieving excellent yields, and these products are now shipping across our major end markets.”

Observers note Micron’s jump in stock is due to a better-than-expected Q2 forecast. Yahoo Finance’s Jared Blikre said the Micron’s Q2 guidance is what’s catching investors’ attention. “The top line numbers coming in, the headline numbers coming in, [are] basically as expected,” Blikre said. “A few small beats. But really the guidance I think is what the investors are focusing on here.”

Micron DDR5 technology advancements
Micron DDR5 technology advancements. (Source: Micron Technology)(Click on the image to enlarge)

Micron expects its Q2 revenue to reach $7.5 billion, plus or minus $200 million. The chipmaker also expects non-GAP profits to reach $1.94 per share, plus or minus $0.10. Wall Street’s estimates forecast a revenue of $7.27 billion, with $1.86 per share.

As for Micron’s end markets, the chipmaker expects demand for DRAM storage capacity to increase to mid-to-high teen ranges in 2022. It also expects its NAND demands to increase to about 30 percent next year.

Mehrotra did note, however, challenges regarding supply and demand issues for its new DDR5 technology, made immediately available on Oct. 27.

“Across the PC industry, demand for DDR5 products is significantly exceeding supply due to non-memory component shortages impacting memory suppliers’ ability to build DDR5 modules,” Mehrotra said. “We expect these shortages to moderate through 2022, enabling bit shipments of DDR5 to grow to meaningful levels in the second half of calendar 2022.”

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