Micron: Fiscal 2Q15 Financial Results

(in $ million)	2Q14	2Q15	6 mo. 14	6 mo. 15
Revenue	4,107	4,166	8,149	8,739
*Growth*		1%		7%
Net income (loss)	731	934	1,089	1,937

Micron Technology, Inc. announced results of operations for its second quarter of fiscal 2015, which ended March 5, 2015.

Revenues for the second quarter of fiscal 2015 (a 13-week fiscal quarter) were $4.17 billion and were 9% lower compared to the first quarter of fiscal 2015 (a 14-week fiscal quarter) and 1% higher compared to the second quarter of fiscal 2014.

Cash flows from operations were $1.25 billion for the second quarter of fiscal 2015.

The first quarter of fiscal 2015 included an additional week, consistent with the company’s 52/53 week fiscal year.

On a normalized basis, revenues for the second fiscal quarter of 2015 were down 2% sequentially.

“Micron posted another solid quarter in our fiscal Q2 2015,” said CEO Mark Durcan. “We are pleased with our progress on technology and product migrations and remain confident in the performance of our business.”

GAAP Income and Per Share Data
On a GAAP basis, net income attributable to shareholders for the second quarter of fiscal 2015 was $934 million, or $0.78 per diluted share, compared to net income of $1.00 billion, or $0.84 per diluted share, for the first quarter of fiscal 2015 and net income of $731 million, or $0.61 per diluted share, for the second quarter of fiscal 2014.

Non-GAAP Income and Per Share Data
On a non-GAAP basis, net income attributable to shareholders for the second quarter of fiscal 2015 was $941 million, or $0.81 per diluted share, compared to net income of $1.14 billion, or $0.97 per diluted share, for the first quarter of fiscal 2015.

Revenues for the second quarter of fiscal 2015 were 9% lower compared to the first quarter of fiscal 2015 primarily due to declines in DRAM unit volumes as a result of one less week in the second quarter of fiscal 2015, and to decreases in ASPs for both NAND and DRAM.

The company’s overall consolidated gross margin of 34% for the second quarter of fiscal 2015 was down 2% compared to the first quarter of fiscal 2015 primarily due to lower ASPs for NAND and DRAM, partially offset by lower manufacturing costs.

Investments in capital expenditures were $853 million for the second quarter of fiscal 2015. The company ended the second quarter of fiscal 2015 with cash and marketable investments of $6.35 billion.

Comments

Mark Durcan, chairman and CEO:
"We’re currently in pilot production of our gen 1 32 layers 3D NAND with early sampling and progress. We expect to be in coproduction of both MLC and TLC versions by calendar Q4 of this year with system level solutions following soon thereafter. 3D will be a meaningful percentage of trade NAND supply in calendar 2016 and will represent a majority of our bits during 2017. Our gen 2 3D NAND technology is progressing nicely in R&D.
"For 2016 as we see the benefit of 20 nanometer conversions we expect to be in line with or slightly above the industry bit growth. We expect our traded NAND bit growth to be below marketing calendar ’15 as we tune our product portfolio to more value-added applications and prepare for a 3D manufacturing ramp throughout 2016. Once complete our Singapore fab expansion and ongoing conversion of existing planar capacity to 3D NAND could support 40% to 50% bit growth per annum over an extended time horizon."

Mark Heil, corporate controller and interim principal financial and accounting officer:
"On the trade NAND side revenue increased 3% in the second quarter with a 12% increase in bit sales volume, partially offset by a 9% decrease in the average selling price.
"On a consolidated basis, we’re guiding total revenue for the third quarter to be in the range of 3.8 billion to 4.05 billion."

Mark Adams, president and interim CFO:
"The NAND market has gone through some challenging quarters of late, but we’ve seen signs that the market pricing has stabilized. As a percentage of total revenue trade NAND represented 29% with gross margins down slightly quarter-on-quarter as we guided during our first quarter call. Within trade NAND, the sales components represented about 50% in the second quarter. SSD units approximately 20%, our mobile NAND was roughly low teens while AIMM and other embedded were roughly in the mid single-digit percentages.
"The revenue for our Storage Business Unit or referred to as SBU was recorded at 954 million in Q2, down slightly quarter-over-quarter."