On Wednesday afternoon, Micron reported February quarter (fiscal second quarter) revenue of $5.84 billion (down 21% annually) and non-GAAP EPS of $1.71, beating consensus analyst estimates of $5.8 billion and $1.60. However, on its earnings call, the memory giant guided for May quarter revenue of $4.6 billion to $5 billion (down 38% annually at the midpoint) and EPS of $0.75 to $0.95, below consensus estimates of $5.28 billion and $1.18.
---
So lets see. If $4.8 billion in Q2 sales produces $0.85 EPS, and expenses quarter over quarter are flat at $810 million......I think they need operating income of about $1.175b to get about 85 cents EPS. So my math says
$4.8 billion
41% gross margin
$1.97 gross profit
$810 op ex
$1.16b Op Profit
Produces 85 cents EPS.
So gross margins are expected to fall from 59% two quarters ago to 50% last quarter and on to 41% next quarter, and sales are expected to decline from $5.8b to $4.8b in one quarter.
MU's sales went from $7.9b and 59% gross margin last Q, to $5.8b and 50% gross margin this Q, to $4.8b and 41% gross margin next Q.
Inventories went from $3.6b two quarters ago, to $3.9b last quarter to $4.4b in the just completed quarter.
I don't see how this signals any bottom, but what do I know? Inventories are rising, gross margins are falling and expected to continue to fall, sales the same, going down.
I haven't listened to the call, so perhaps they said some good things about the second half. I think NAND capacity expansion is expected to stop this summer, so at least production ramps should slow a bit. The second half may have the inventory replenishment since purchasing seems to have slammed to a halt over the past few months. But MU seems on the verge of EPS negative if prices collapse for another quarter or two.
I don't see what is so great about the just completed Q. If anyone thinks this indicates a bottom in memory, I'm curious to ready "why?"...... |
