Micron Technology (MU) Up 7 Percent on 4Q Earnings

Shares of Micron Technology Inc. (MU) were up +2.13 or +6.72 percent to $33.83 on Friday as the U.S. major market indexes gained almost one percent on the day. Micron shares gained after the company reported better than expected fourth quarter earnings on Friday. In addition, several companies upwardly revised their price target for the company's stock.

Boise, Idaho based Micron Technology Inc. is a transnational corporation focused on the production of semiconductor components.
These include Dynamic Random Access Memory or DRAM, Synchronous Dynamic Random Access Memory or SDRAM, Solid State Drives or SSDs and flash memory chips. Its consumer products are marketed under the brands Lexar and Crucial Technologies. Micron, together with Intel (INTC) is responsible for the creation of IM Flash Technologies, producer of NAND flash memory. Micron had a profit of +$1.19 billion on revenue of $14.17 billion in 2013 and is ranked as one of the world's top 5 semiconductor producing companies.

Micron reported record revenue of more than +$4.23 billion, an increase of +49 percent over the previous year and six percent over the previous quarter. Net income came to +$1.15 billion or $0.82 per share excluding some items. Analysts were expecting the company to report +$4.16 billion in revenue and net income of $0.81 per share.

For the entire fiscal 2014 year, Micron generated record revenue of $16.4 billion with record net income of more than $3.0 billion. Free cash flow came to $2.6 billion based on operating cash flow of $5.7 billion less CapEx of 3.1billion.

Micron Technologies' Chief Executive Officer, Mark Durcan said in a conference call with analysts that, "We believe the DRAM industry; supply demand balance will continue to be favorable for the foreseeable future. Demand elasticity has declined from historical levels and cost per bit is no longer the major factor driving demand growth. For NAND, we are projecting industry supply growth in the high 30% to low 40% range for 2014. This includes an increase in industry wafer production of just over 10%, with the remaining supply growth coming from technology."

In addition to reporting stellar fourth quarter earnings, several analysts have upwardly revised their forecasts for Micron: Jeffries' Sundeep Bajikar predicts DRAM industry changes will lead to $4 per share in future earnings with a forecast of $3.4 billion by the end of its fiscal 2015 year, up from $2.6 billion in fiscal 2014.

Nomura Securities' Romit Shah predicted much better than expected growth prospects than his previous prediction of a four percent drop in DRAM ASP growth. Sterne Agee analyst Vijay Rakesh said that "With quarterly earnings per share approaching around $1 per quarter, we are raising estimates and our price target to $42". He continued "We expect consensus estimates to move higher."

Micron Technologies stock is already +87 percent higher for the year, with the stock trading just below its yearly high of $34.85 made in July. With increased demand for its products and continued improvement in its bottom line, the stock could make a new yearly high as early as this week.

Other News About Micron Technologies
Analysts View Micron Even Higher After Earnings, Targets and Calls
More analyst revisions and upgrades to outlooks on Micron.
Micron Technology, Inc. Benefits From Industry Consolidation, Analysts Say
Deutsch Bank analyst reiterates buy recommendation with a $40 price target.

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Published on Sep 29, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2016. Content published with author's permission.

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