Whittington MU Report said:"
Dead (Spot) Men Tell No Tales
Though you’d hardly know it from the recent share price movement (cut in half in less than sixty
days), in just a week’s time Micron is set to report all-time record earnings for August 2000 FQ4.
We believe that, year-end adjustments included, not only will Micron make or exceed our $1.15 per
share estimate but even with today’s pricing turmoil they still stand even odds to make the upcoming
November 2000 FQ1’s $1.59 per share.
Given the steep rise in shares over the last year, now standing at roughly 600 million but moving to
approximately 625 million post called convert effective in two weeks, this translates into net income
rivaling the $900-odd million earned in F95. This, in just one quarter or the other - not both combined,
just one.
For all of F00, on our FQ4 estimate, Micron will soon be seen to have earned $1.475 billion net after
tax and subsequent to the October 14 convertible conversion will have an estimated $2 billion in cash,
with $200 million in debt.
Today’s earnings release from their PC subsidiary reflects:
1. sharply increased volumes from MU to Spectek, the world’s leading off-spec DRAM module
maker, roughly commensurate with higher than expected bit growth at MU,
2. internalization of the DRAM module market which effectively shrinks the DRAM spot market
opportunity for other DRAM suppliers, and
3. much preferred transfer pricing for MU than a year ago, with their COGS capture moving to 90%
in Nov 2000 quarter from 50% in Aug 1999 quarter and 75% in Aug 2000. |
