Micron Falls Flat on Mixed Earnings
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.
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.