Micron Falls Flat on Mixed Earnings

By Chris Lange Updated Jan 13, 6:10AM EST · Published Jun 30, 4:29PM EDT

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Micron Falls Flat on Mixed Earnings — © Thinkstock

Micron Technology, Inc. (NASDAQ: MU) reported fiscal third-quarter financial results after the markets closed on Thursday. The company said that it had a net loss of $0.08 per share on $2.90 billion in revenue. There were consensus estimates from Thomson Reuters that called for a net loss of $0.09 per share on $2.96 billion in revenue. The same period from last year had $0.54 in earnings per share (EPS) on $3.85 billion in revenue.

Revenues for the third quarter were slightly lower sequentially 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% increase in unit sales partially offset by an 11% decline in average selling prices.

Sales of trade Non-Volatile products decreased due to a 10% decrease in unit sales and a 6% decline in average selling prices. The company’s overall consolidated gross margin of 17% for the third quarter of fiscal 2016 was 3% lower compared to the second quarter primarily due to lower average selling prices partially offset by manufacturing cost reductions.

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The company is also implementing an initiative for cost savings. Essentially Micron said that there will be a global workforce reduction, which is expected to save over $300 million in fiscal 2017.

Mark Durcan, CEO of Micron, commented:

Although we have made good progress in deploying our advanced DRAM and NAND technologies, we continue to face challenging market conditions. 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.

Cash flows from operations totaled $389 million for the third quarter of fiscal 2016. On the books, cash, cash equivalents, and marketable securities totaled $5.65 billion at the end of the quarter, versus $5.63 billion at the end of the previous fiscal year.

Shares of Micron closed up 4.3% at $13.76, with a consensus analyst price target of $15.20 and a 52-week trading range of $9.31 to $20.57. Following the release of the earnings report the stock was initially down 8% at $12.61 in the after-hours trading session.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.