Micron. Back In The Black & No Going Back
Micron surprised by regaining profitability one quarter earlier than anticipated
Micron reported Q224 revenues of $5.8 billion, up 23% QoQ and up 58% YoY. It also well above the high end of the guided range of $5.5 billion. Gross margin came in a 20%, a full 19 points higher QoQ and well above the guided high end of 14.5%. Net income turned positive and amounted to $476 million. This compares to a loss of $1 billion in the prior quarter and it brings to an end a six quarter long loss making streak that has set the company back a staggering $5.4 billion dollars.
On top of these surprise beats came an even stronger raise with Micron forecasting current quarter revenues of $6.6 billion & gross margin of 26.5% at their respective midpoints.
We finished our last note on Micron, Micron. Earnings Puts & Takes. Take Your Pick, from December 29 last, with the following prediction:
With Micron’s share price presently within 10% of its all time record highs, we remain concerned as we recently outlined Micron. The Rally Is Premature. However, given the momentum the stock is currently experiencing, one suspects that a breach of the $100 level is eminently feasible in the coming months. Let’s see…
And thus it was that after their beat & raise report, Micron shares surged by around 18% in after hours trading leaving them poised to open $113.75 later tonight.
Almost across the board, Micron’s outlook for their various business segments improved QoQ. We review their commentary on PC, Smartphone, Server (general +AI). As you might have expected, much discussion on the call centred around Micron’s HBM offering. While it looks set to have a bright future, it remained a net drag on margins last quarter. Despite this, it was instrumental in driving a high teens QoQ increase in overall DRAM ASPs. We explain why and share our thoughts on the impact HBM will have on older DRAM products, and the opportunity that’s unfolding for both the smaller memory players and for China’s memory champions. Thanks as always for reading!
Keep reading with a 7-day free trial
Subscribe to Semicon Alpha to keep reading this post and get 7 days of free access to the full post archives.