MU
$64.09
Micron Technology
($.14)
(.22%)
Earnings Details
Quarter August 2020
Tuesday, September 29, 2020 4:04:00 PM
Tweet Share Watch
Summary

Micron Technology Misses

Micron Technology (MU) reported Quarter August 2020 earnings of $1.00 per share on revenue of $6.1 billion. The consensus earnings estimate was $0.95 per share on revenue of $5.9 billion. The Earnings Whisper number was $1.02 per share. Revenue grew 24.4% on a year-over-year basis.

The company said it expects first quarter earnings of $0.40 to $0.54 per share on revenue of $5.00 billion to $5.40 billion. The current consensus earnings estimate is $0.70 per share on revenue of $5.31 billion for the quarter ending November 30, 2020.

Micron Technology Inc is a manufacturer and marketer of DRAM, NAND Flash memory, CMOS image sensors and other semiconductor components. It has two segments, Memory and Imaging.

Results
Reported Earnings
$1.00
Earnings Whisper
$1.02
Consensus Estimate
$0.95
Reported Revenue
$6.06 Bil
Revenue Estimate
$5.91 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Micron Technology, Inc. Reports Results for the Fourth Quarter and Full Year of Fiscal 2020

DRAM portfolio strengthened with 1z ramp; High-value NAND shipments reach record levels in FY20

BOISE, Idaho, Sept. 29, 2020 (GLOBE NEWSWIRE) -- Micron Technology, Inc. (Nasdaq: MU) today announced results for its fourth quarter and full year of fiscal 2020, which ended Sept. 3, 2020.

Fiscal Q4 2020 highlights

  • Revenue of $6.06 billion versus $5.44 billion for the prior quarter and $4.87 billion for the same period last year
  • GAAP net income of $988 million, or $0.87 per diluted share
  • Non-GAAP net income of $1.23 billion, or $1.08 per diluted share
  • Operating cash flow of $2.27 billion versus $2.02 billion for the prior quarter and $2.23 billion for the same period last year

Fiscal 2020 highlights

  • Revenue of $21.44 billion versus $23.41 billion for the prior year
  • GAAP net income of $2.69 billion, or $2.37 per diluted share
  • Non-GAAP net income of $3.24 billion, or $2.83 per diluted share
  • Operating cash flow of $8.31 billion versus $13.19 billion for the prior year

“Micron delivered solid fiscal fourth quarter revenue and EPS resulting from strong DRAM sales in cloud, PC and gaming consoles and an extraordinary increase in QLC NAND shipments,” said Micron Technology President and CEO Sanjay Mehrotra. “We look forward to improving market conditions throughout calendar 2021, driven by 5G, cloud and automotive growth, and we are excited by the continued momentum in our product portfolio.”

Quarterly Financial Results
(in millions, except per share amounts)GAAP(1) Non-GAAP(2)
FQ4-20FQ3-20FQ4-19 FQ4-20FQ3-20FQ4-19
        
Revenue$6,056 $5,438 $4,870  $6,056 $5,438 $4,870 
Gross margin2,068 1,763 1,395  2,111 1,804 1,491 
percent of revenue34.1%32.4%28.6% 34.9%33.2%30.6%
Operating expenses911 875 745  809 823 797 
Operating income1,157 888 650  1,302 981 694 
percent of revenue19.1%16.3%13.3% 21.5%18.0%14.3%
Net income attributable to Micron988 803 561  1,229 941 637 
Diluted earnings per share0.87 0.71 0.49  1.08 0.82 0.56 


Annual Financial Results
(in millions, except per share amounts)GAAP(1) Non-GAAP(2)
FY 20FY 19 FY 20FY 19
      
Revenue$21,435 $23,406  $21,435 $23,406 
Gross margin6,552 10,702  6,718 10,973 
percent of revenue30.6%45.7% 31.3%46.9%
Operating expenses3,549 3,326  3,299 3,172 
Operating income3,003 7,376  3,419 7,801 
percent of revenue14.0%31.5% 16.0%33.3%
Net income attributable to Micron2,687 6,313  3,235 7,314 
Diluted earnings per share2.37 5.51  2.83 6.35 

Investments in capital expenditures, net(2) were $2.16 billion for the fourth quarter of 2020 and $7.95 billion for the full year of 2020, which resulted in adjusted free cash flows(2) of $111 million for the fourth quarter of 2020 and $361 million for the full year of 2020. Micron repurchased approximately 824,000 shares of its common stock for $41 million during the fourth quarter of 2020 and 3.6 million shares of its common stock for $176 million during the full year of 2020 and ended the year with cash, marketable investments, and restricted cash of $9.26 billion, for a net cash(2) position of $2.61 billion.

Business Outlook

The following table presents Micron’s guidance for the first quarter of 2021:

FQ1-21GAAP(1) OutlookNon-GAAP(2) Outlook
   
Revenue$5.2 billion ± $200 million$5.2 billion ± $200 million
Gross margin26.5% ± 1%27.5% ± 1%
Operating expenses$873 million ± $25 million$825 million ± $25 million
Interest (income) expense, net$37 million$35 million
Diluted earnings per share$0.39 ± $0.07$0.47 ± $0.07

Further information regarding Micron’s business outlook is included in the prepared remarks and slides, which have been posted at investors.micron.com.

Investor Webcast

Micron will host a conference call on Tuesday, Sept. 29, 2020 at 2:30 p.m. MT to discuss its fourth quarter financial results and provide forward-looking guidance for its first quarter. A live webcast of the call will be available online at investors.micron.com. A webcast replay will be available for one year after the call. For Investor Relations and other company updates, follow @MicronTech on Twitter at twitter.com/MicronTech.

About Micron Technology, Inc.

We are an industry leader in innovative memory and storage solutions. Through our global brands — Micron® and Crucial® — our broad portfolio of high-performance memory and storage technologies, including DRAM, NAND, 3D XPoint™ memory, and NOR, is transforming how the world uses information to enrich life for all. Backed by more than 40 years of technology leadership, our memory and storage solutions enable disruptive trends, including artificial intelligence, 5G, machine learning, and autonomous vehicles, in key market segments like mobile, data center, client, consumer, industrial, graphics, automotive, and networking. Our common stock is traded on Nasdaq under the MU symbol. To learn more about Micron Technology, Inc., visit micron.com.

Micron and the Micron orbit logo are trademarks of Micron Technology, Inc. All other trademarks are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements regarding the industry, our strategic position, and our financial and operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially. Please refer to the documents we file with the Securities and Exchange Commission, specifically our most recent Form 10-K and Form 10-Q. These documents contain and identify important factors that could cause our actual results to differ materially from those contained in these forward-looking statements. These certain factors can be found at www.micron.com/certainfactors. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. We are under no duty to update any of the forward-looking statements after the date of this release to conform these statements to actual results.

(1)GAAP represents U.S. Generally Accepted Accounting Principles.
(2)Non-GAAP represents GAAP excluding the impact of certain activities, which management excludes in analyzing our operating results and understanding trends in our earnings, adjusted free cash flow, net cash, and business outlook. Further information regarding Micron’s use of non-GAAP measures and reconciliations between GAAP and non-GAAP measures are included within this press release.


MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)
(Unaudited)

 4th Qtr.3rd Qtr.4th Qtr.Year Ended
 September 3,
2020
May 28,
2020
August 29,
2019
September 3,
2020
August 29,
2019
      
Revenue$6,056 $5,438 $4,870 $21,435 $23,406 
Cost of goods sold3,988 3,675 3,475 14,883 12,704 
Gross margin2,068 1,763 1,395 6,552 10,702 
      
Selling, general, and administrative231 216 212 881 836 
Research and development630 649 623 2,600 2,441 
Other operating (income) expense, net50 10 (90) 68 49 
Operating income1,157 888 650 3,003 7,376 
      
Interest income13 23 57 114 205 
Interest expense(50) (51) (39) (194) (128) 
Other non-operating income (expense), net5 10 (13) 60 (405) 
 1,125 870 655 2,983 7,048 
      
Income tax (provision) benefit(136) (68) (71) (280) (693) 
Equity in net income (loss) of equity method investees1 3 2 7 3 
Net income990 805 586 2,710 6,358 
      
Net income attributable to noncontrolling interests(2) (2) (25) (23) (45) 
Net income attributable to Micron$988 $803 $561 $2,687 $6,313 
      
Earnings per share     
Basic$0.89 $0.72 $0.51 $2.42 $5.67 
Diluted0.87 0.71 0.49 2.37 5.51 
      
Number of shares used in per share calculations     
Basic1,111 1,111 1,104 1,110 1,114 
Diluted1,131 1,129 1,128 1,131 1,143 



MICRON TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)

As ofSeptember 3,
2020
May 28,
2020
August 29,
2019
    
Assets   
Cash and equivalents$7,624 $8,267 $7,152 
Short-term investments518 391 803 
Receivables3,912 3,603 3,195 
Inventories5,607 5,405 5,118 
Other current assets304 233 235 
Total current assets17,965 17,899 16,503 
Long-term marketable investments1,048 577 1,164 
Property, plant, and equipment31,031 30,081 28,240 
Intangible assets334 332 340 
Deferred tax assets707 775 837 
Goodwill1,228 1,228 1,228 
Operating lease right-of-use assets584 599  
Other noncurrent assets781 514 575 
Total assets$53,678 $52,005 $48,887 
    
Liabilities and equity   
Accounts payable and accrued expenses$5,817 $5,364 $4,626 
Current debt270 330 1,310 
Other current liabilities548 491 454 
Total current liabilities6,635 6,185 6,390 
Long-term debt6,373 6,356 4,541 
Noncurrent operating lease liabilities533 540  
Noncurrent unearned government incentives643 553 636 
Other noncurrent liabilities498 453 452 
Total liabilities14,682 14,087 12,019 
    
Commitments and contingencies   
    
Redeemable noncontrolling interest 98 98 
    
Micron shareholders’ equity   
Common stock119 119 118 
Additional capital8,917 8,764 8,214 
Retained earnings33,384 32,402 30,761 
Treasury stock(3,495) (3,454) (3,221) 
Accumulated other comprehensive income (loss)71 (11) 9 
Total Micron shareholders’ equity38,996 37,820 35,881 
Noncontrolling interest in subsidiary  889 
Total equity38,996 37,820 36,770 
Total liabilities and equity$53,678 $52,005 $48,887 
    



MICRON TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)

For the year endedSeptember 3,
2020
August 29,
2019
   
Cash flows from operating activities  
Net income$2,710 $6,358 
Adjustments to reconcile net income to net cash provided by operating activities  
Depreciation expense and amortization of intangible assets5,650 5,424 
Amortization of debt discount and other costs26 49 
Stock-based compensation328 243 
(Gain) loss on debt prepayments, repurchases, and conversions(40) 396 
Change in operating assets and liabilities  
Receivables(723) 2,431 
Inventories(489) (1,528) 
Accounts payable and accrued expenses725 (174) 
Deferred income taxes, net79 150 
Other40 (160) 
Net cash provided by operating activities8,306 13,189 
   
Cash flows from investing activities  
Expenditures for property, plant, and equipment(8,223) (9,780) 
Purchases of available-for-sale securities(1,857) (4,218) 
Proceeds from sales of available-for-sale securities1,458 1,504 
Proceeds from maturities of available-for-sale securities814 1,541 
Proceeds from government incentives262 748 
Other(43) 120 
Net cash provided by (used for) investing activities(7,589) (10,085) 
   
Cash flows from financing activities  
Repayments of debt(4,366) (3,340) 
Acquisition of noncontrolling interest in IMFT(744)  
Payments to acquire treasury stock(251) (2,729) 
Payments on equipment purchase contracts(63) (75) 
Proceeds from issuance of debt5,000 3,550 
Proceeds from issuance of stock225 179 
Other(118) (23) 
Net cash provided by (used for) financing activities(317) (2,438) 
   
Effect of changes in currency exchange rates on cash, cash equivalents, and restricted cash11 26 
   
Net increase (decrease) in cash, cash equivalents, and restricted cash411 692 
Cash, cash equivalents, and restricted cash at beginning of period7,279 6,587 
Cash, cash equivalents, and restricted cash at end of period$7,690 $7,279 


MICRON TECHNOLOGY, INC.
NOTES
(Unaudited)

Property, Plant, and Equipment

We periodically assess the estimated useful lives of our property, plant, and equipment. Based on our assessment of planned technology node transitions, capital spending, and re-use rates, we revised the estimated useful lives of the existing equipment in our NAND wafer fabrication facilities and our research and development facilities from five years to seven years as of the beginning of the first quarter of 2020. This revision reduced our aggregate depreciation expense by approximately $675 million in 2020, of which approximately $165 million remained capitalized in inventory as of the end of 2020. Adjusting for the effect of the reduced amount of depreciation expense remaining in inventory, the revision in estimated useful lives benefited both operating income and net income by approximately $150 million and diluted earnings per share by approximately $0.13 for the fourth quarter of 2020, and benefited both operating income and net income by approximately $510 million and diluted earnings per share by approximately $0.45 for 2020.

Adoption of Lease Accounting Standard

In the first quarter of 2020, we adopted ASU 2016-02 – Leases (as amended, “ASC 842”), which amends a number of aspects of lease accounting, including requiring lessees to recognize operating leases with a term greater than one year on their balance sheet as a right-of-use asset and corresponding lease liability, measured at the present value of lease payments. In adoption, we applied the modified retrospective method and elected to not recast prior periods. As a result, we recognized $567 million for operating lease liabilities and right-of-use assets and reclassified an additional $66 million of other balances to right-of-use assets to conform to the new presentation requirements of ASC 842.


MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In millions, except per share amounts)

 4th Qtr.3rd Qtr.4th Qtr.Year Ended
 September 3,
2020
May 28,
2020
August 29,
2019
September 3,
2020
August 29,
2019
      
GAAP gross margin$2,068 $1,763 $1,395 $6,552 $10,702 
Stock-based compensation37 34 29 139 102 
Start-up and preproduction costs  12  58 
Employee severance(1)  47  73 
Other7 7 8 27 38 
Non-GAAP gross margin$2,111 $1,804 $1,491 $6,718 $10,973 
      
GAAP operating expenses$911 $875 $745 $3,549 $3,326 
Stock-based compensation(52) (48) (38) (189) (141) 
Employee severance  (32)  (43) 
Restructure and asset impairments(50) (4) 122 (60) 32 
Other   (1) (2) 
Non-GAAP operating expenses$809 $823 $797 $3,299 $3,172 
      
GAAP operating income$1,157 $888 $650 $3,003 $7,376 
Stock-based compensation89 82 67 328 243 
Start-up and preproduction costs  12  58 
Employee severance(1)  79  116 
Restructure and asset impairments50 4 (122) 60 (32) 
Other7 7 8 28 40 
Non-GAAP operating income$1,302 $981 $694 $3,419 $7,801 
      
GAAP net income attributable to Micron$988 $803 $561 $2,687 $6,313 
Stock-based compensation89 82 67 328 243 
Start-up and preproduction costs  12  58 
Employee severance(1)  79  116 
Restructure and asset impairments50 4 (122) 60 (32) 
Amortization of debt discount and other costs6 4 10 26 49 
(Gain) loss on debt repurchases and conversions 2 10 (40) 396 
Other7 7 13 28 57 
Estimated tax effects of above, non-cash changes in net deferred income taxes, assessments of tax exposures, and impact of U.S. income tax reform90 39 7 146 114 
Non-GAAP net income attributable to Micron$1,229 $941 $637 $3,235 $7,314 
      
GAAP weighted-average common shares outstanding - Diluted1,131 1,129 1,128 1,131 1,143 
Adjustment for stock-based compensation and capped calls11 13 6 10 7 
Non-GAAP weighted-average common shares outstanding - Diluted1,142 1,142 1,134 1,141 1,150 
      
GAAP diluted earnings per share$0.87 $0.71 $0.49 $2.37 $5.51 
Effects of the above adjustments0.21 0.11 0.07 0.46 0.84 
Non-GAAP diluted earnings per share$1.08 $0.82 $0.56 $2.83 $6.35 

RECONCILIATION OF GAAP TO NON-GAAP MEASURES, Continued

 4th Qtr.3rd Qtr.4th Qtr.Year Ended
 September 3,
2020
May 28,
2020
August 29,
2019
September 3,
2020
August 29,
2019
      
GAAP net cash provided by operating activities$2,271 $2,023 $2,233 $8,306 $13,189 
Investments in capital expenditures, net     
Expenditures for property, plant, and equipment, net(1) (2,268) (1,937) (1,983) (8,154) (9,634) 
Payments on equipment purchase contracts(14) (20) (21) (63) (75) 
Amounts funded by partners122 35 80 272 754 
Adjusted free cash flow$111 $101 $309 $361 $4,234 


(1)Expenditures for property, plant, and equipment, net include proceeds from sales of property, plant, and equipment of $12 million for the fourth quarter of 2020, $7 million for the third quarter of 2020, $45 million for the fourth quarter of 2019, $69 million for the full year of 2020, and $146 million for the full year of 2019.


As ofSeptember 3,
2020
May 28,
2020
August 29,
2019
    
Cash and short-term investments$8,142 $8,658 $7,955 
Current and noncurrent restricted cash66 53 127 
Long-term marketable investments1,048 577 1,164 
Current and long-term debt(6,643) (6,686) (5,851) 
Net cash$2,613 $2,602 $3,395 

The tables above reconcile GAAP to non-GAAP measures of gross margin, operating expenses, operating income, net income attributable to Micron, diluted shares, diluted earnings per share, adjusted free cash flow, and net cash. The non-GAAP adjustments above may or may not be infrequent or nonrecurring in nature, but are a result of periodic or non-core operating activities. We believe this non-GAAP information is helpful in understanding trends and in analyzing our operating results and earnings. We are providing this information to investors to assist in performing analysis of our operating results. When evaluating performance and making decisions on how to allocate our resources, management uses this non-GAAP information and believes investors should have access to similar data when making their investment decisions. We believe these non-GAAP financial measures increase transparency by providing investors with useful supplemental information about the financial performance of our business, enabling enhanced comparison of our operating results between periods and with peer companies. The presentation of these adjusted amounts varies from amounts presented in accordance with U.S. GAAP and therefore may not be comparable to amounts reported by other companies. Our management excludes the following items in analyzing our operating results and understanding trends in our earnings:

  • Stock-based compensation;
  • Flow-through of business acquisition-related inventory adjustments;
  • Acquisition-related costs;
  • Start-up and preproduction costs;
  • Employee severance;
  • Restructure and asset impairments;
  • Amortization of debt discount and other costs, including the accretion of non-cash interest expense associated with our convertible debt and MMJ creditor debt;
  • Gains and losses from debt repurchases and conversions;
  • Gains and losses from business acquisition activities;
  • Impact of U.S. income tax reform for the one-time transition tax, release of U.S. valuation allowance, and remeasurement of net deferred taxes reflecting lower U.S. corporate tax rates; and
  • The estimated tax effects of above, non-cash changes in net deferred income taxes, and assessments of tax exposures.

Non-GAAP diluted shares are adjusted for the impact of additional shares resulting from the exclusion of stock-based compensation from non-GAAP income. Non-GAAP diluted shares also include the impact of capped calls, which are anti-dilutive in GAAP earnings per share but are expected to mitigate the dilutive effect of convertible notes, based on the average share price for the period the capped calls were outstanding.


MICRON TECHNOLOGY, INC.
RECONCILIATION OF GAAP TO NON-GAAP OUTLOOK

 GAAP Outlook Adjustments Non-GAAP Outlook
       
Revenue$5.2 billion ± $200 million —    $5.2 billion ± $200 million
Gross margin26.5% ± 1% 1% A 27.5% ± 1%
Operating expenses$873 million ± $25 million $48 million B $825 million ± $25 million
Interest (income) expense, net$37 million $2 million C $35 million
Diluted earnings per share(1)$0.39 ± $0.07 $0.08 A, B, C, D $0.47 ± $0.07


Non-GAAP Adjustments
(in millions)
 
   
AStock-based compensation – cost of goods sold$39 
AOther – cost of goods sold7 
BStock-based compensation – sales, general, and administrative25 
BStock-based compensation – research and development23 
CAmortization of debt discount and other costs2 
DTax effects of the above items and non-cash changes in net deferred income taxes(1) 
  $95 


(1)GAAP earnings per share based on approximately 1.13 billion diluted shares and non-GAAP earnings per share based on approximately 1.15 billion diluted shares.

The tables above reconcile our GAAP to non-GAAP guidance based on the current outlook. The guidance does not incorporate the impact of any potential business combinations, divestitures, restructuring activities, balance sheet valuation adjustments, strategic investments, financing transactions, and other significant transactions. The timing and impact of such items are dependent on future events that may be uncertain or outside of our control. 


Contacts:Farhan AhmadInvestor Relationsfarhanahmad@micron.com(408) 834-1927Erica Rodriguez PompenMedia Relationsepompen@micron.com(408) 834-1873

Micron logo_blue_RGB.jpg

Source: Micron Technology, Inc.