Micron Earnings Show Tech Turnarounds Can Win

On a sequential basis, revenue rose 2%. On a year-over-year basis, this is a 98% gain. Adjusted earnings of $989 million equaled sequential growth of 12%.

Cash flow from operations came to $1.39 billion in the second quarter, while capital spending $565 million. Micron ended the quarter with cash and marketable investments of $5.06 billion.

On the guidance front, Micron said that DRAM and NAND memory prices would be lower by low single-digits in the company’s current quarter, but that shipments should increase in the double digits. SG&A expenses are expected to rise and capex spending is forecast at $2.6 billion to $3.2 billion.

On the conference call, the CEO said:

Beyond 2014, we expect similar year-over-year industry supply growth in the 20-30% range driven by relatively stable wafer output coupled with slowing process technology migrations compared to historical trends. We continue to forecast five year DRAM demand CAGR in the mid 20-30% range which implies continued favorable market conditions and likely a reduction in volatility compared to historical DRAM trends. … We are forecasting a five year NAND demand CAGR in the high 30 to low 40% range.

Shares are up more than 150% from historic lows just a year ago of around $9.30 a share. The company’s acquisition of Japan’s Elpida Memory out of bankruptcy has been a big win for Micron.

The consensus price target on the DRAM and flash memory king’s stock is around $27.70. Friday morning the stock was started as Overweight with a price target of $30 at Piper Jaffray, among other boosts. Please note how shares rose more than 150% from their historic lows too.

Micron shares closed down 1.4% at $24.00 on Thursday, but traded up 4.5% in Friday’s premarket to $25.08. Micron’s 52-week trading range is $9.04 to $25.68.

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