Micron: Fiscal 3Q13 Financial Results

(in US$ million)	3Q12	3Q13	9 mo. 12	9 mo. 13
Revenues	2,172	2,318	6,271	6,230
*Growth*		7%		*-1%*
Net income (loss)	(320)	43	(789)	(518)

Micron Technology, Inc. announced results of operations for its third quarter of fiscal 2013, which ended May 30, 2013.

For the third quarter, the company had net income attributable to Micron shareholders of $43 million, or $0.04 per diluted share, on net sales of $2.3 billion. The results for the third quarter of fiscal 2013 compare to a net loss of $286 million, or ($0.28) per diluted share, on net sales of $2.1 billion for the second quarter of fiscal 2013, and a net loss of $320 million, or ($0.32) per diluted share, on net sales of $2.2 billion for the third quarter of fiscal 2012.

The company’s consolidated gross margin improved to 24% in the third quarter of fiscal 2013 compared to 18% in the second quarter of fiscal 2013. Gross margins for both DRAM and NAND flash products improved due to increases in average selling prices. DRAM gross margins also benefited from decreases in manufacturing costs.

Revenues from sales of DRAM products in the third quarter of fiscal 2013 were 23% higher compared to the second quarter due to a 16% increase in average selling prices and a 6% increase in sales volume. Revenues from sales of NAND flash products were 7% higher in the third quarter of fiscal 2013 compared to the second quarter primarily due to an 8% increase in trade NAND flash average selling prices.

Cash flows from operations for the third quarter of fiscal 2013 were $624 million, while investments in capital expenditures were $235 million. The company ended the third fiscal quarter with cash and investments of $2.9 billion.

"As the memory market shows improvement in both DRAM and NAND fundamentals, we continue to focus our efforts on advancing our operational efficiency," said Micron CEO Mark Durcan. "We have also made progress in securing the necessary approvals related to the Elpida acquisition and are optimistic we will be able to close the transaction in our fiscal fourth quarter ending August 29, 2013."

Comments

Abstracts the earnings call transcript:

Mark Durcan, CEO:
"For NAND, we are forecasting supply up in the mid 30% range this year followed by the low 40s in 2014."

Ronald Foster, CFO:
"Trade NAND bit costs in the third quarter were relatively flat compared to the second quarter due to a higher SSD production, and some costs related to the start of NAND production in the Singapore DRAM fab. So guidance for Q4 Trade NAND is as follows. Using quarter-to-date selling prices, and the projected mix for the quarter, Trade NAND ASPs would be down mid single-digits.
"Bit costs are expected to be down high single-digits, while bit production is expected to be up high single-digits. Key trends affecting for Q4 guidance are, we expect a higher density product mix in NAND, lowering both the ASP and cost per gigabyte while increasing volumes.
"We'd expect also to sell more NAND and SSDs with greater capacity per drive, which slightly lower to the average ASP and cost per gigabyte. We continue the migration to 20-nanometer process technology, resulting in lower costs and increasing bit output into both component discrete sales and SSDs."

Mark Adams, president:
"Our NAND Solutions Group recorded revenue of $730 million, up 2% when compared to our second quarter. Total Trade NAND gross margins were up 5 percentage points quarter-over-quarter, reflecting improved ASPs and stronger penetration into enterprise SSDs.
"Our branded SSD business was $178 million in Q3 and 11% quarter-over-quarter increase. When you combine sales of our Micron branded SSD drives with flash memory we [shift] to our third-party SSD customers, shipments to the SSD segment represented over 60% of our Trade NAND capacity. We continued to migrate the SSD product family to our 20-nanometer flash memory technology with the announcement of our M500 fairly charged at client and web 2.0 applications."