Robert and All, MU, I've heard of them. <G> As expected, in this, the best quarter seasonally for MU, the eps stank the house out. A 19 Cents loss when you are "sold out" is nutso for a $54 stock. When do they make a profit? Not in the first quarter glut and with DRAM prices in the tank. Not in the seasonally lousy second quarter, even after some of the inventory glut is written off by the boxmakers. Next Xmas? I don't think so, but certainly no sooner than that.
So, despite the train wreck of an eps report, how did MU "beat the street." First and most importantly, they led the street to ignore the fact that this was the Xmas quarter, when chippies sell the most product to OEMs. So, they set the bar they had to jump under the ground. Next, they cut capital expenditures by 14%. They took on huge amounts of debt, but, given low rates, even for a junk quality co., that didn't hurt them much. Long Term debt was only up 110%. They held back inventories rather than sell at prices that would assure a larger loss. That is why they were up 19%.
So, negative 19 cents was the "good" quarter. Bad quarters are coming up.
MB |
