Micron: Fiscal 3Q19 Financial Results
Revenue of storage business unit down 11% Y/Y and 29% Q/Q, customer Huawei being one reason
This is a Press Release edited by StorageNewsletter.com on June 26, 2019 at 2:17 pm| (in $ million) | 3Q18 | 3Q19 | 9 mo. 18 | 9 mo. 19 |
| Revenue | 7,797 | 4,788 | 21,951 | 18,536 |
| Growth | -39% | -16% | ||
| Net income (loss) | 3,823 | 840 | 9,810 | 5,752 |
Micron Technology, Inc. announced results for its third quarter of fiscal 2019, which ended May 30, 2019.
3FQ19 Highlights
• Revenue of $4.79 billion versus $7.80 billion for the same period last year
• GAAP net income of $840 million, or $0.74 per diluted share
• Non-GAAP net income of $1.20 billion, or $1.05 per diluted share
• Operating cash flow of $2.71 billion versus $4.26 billion for the same period last year
• Share repurchases of $2.66 billion under the authorized buyback program in the first nine months of 2019
“Micron’s improved competitive position and strong execution helped us deliver solid results despite a challenging environment,” said president and CEO Sanjay Mehrotra. “While we are seeing early signs of demand improvement, we plan to reduce our capital expenditures in fiscal 2020 to help improve industry supply-demand balance.“
Investments in capital expenditures, net of amounts funded by partners, were $2.21 billion for the third quarter of 2019, which resulted in adjusted free cash flow of $504 million. Micron repurchased an aggregate of 67 million shares of its common stock for $2.66 billion during the first nine months of 2019 in connection with its $10 billion share repurchase authorization. The company ended the third quarter with cash, marketable investments, and restricted cash of $7.93 billion for a net cash(4) position of $3.02 billion.
Comments
Storage Business Unit* (SBU) revenue in $ million
| 3FQ18 | 2FQ19 | Growth | 3FQ19 |
Y/Y Growth |
| 1,140 | 813 | -29% | 1,020 | -11% |
*SBU includes SSDs and other storage products, including component-level solutions sold into enterprise and cloud, client, and consumer SSD markets, other discrete storage products sold in component and wafer forms to the removable storage markets, and sales of 3D XPoint memory.
Global 3FQ19 revenue of $4.8 billion was at the midpoint of guidance range and was down 39% on a Y/Y basis and down 18% sequentially from former quarter.
FY19 has been challenging for both Micron and the industry.
Both DRAM and NAND revenue were negatively impacted by restriction on sales to Huawei, without which the company would have reached the high end of its revenue guidance.
The sequential decline of the storage business unit (SBU) was driven by competitive pricing and an unfavorable comparison on component volumes coming off a large one-time sale the firm completed in the prior fiscal quarter.
NAND
- 31% of overall company revenue in 3FQ19
- Sales down 18% Q/Q and down 25% Y/Y
- ASPs declined in the mid-teens percent range, while shipment quantities declined in the mid-single-digit percent range compared to the prior quarter
- Bit shipments down mid-single-digit percent range Q/Q
- Continues to ramp 96-layer and on track to deliver healthy cost declines in FY19
- Good progress on 128-layer 3D NAND which use replacement gate
- High-value solutions now over two-thirds of NAND revenues
- CY19 bit demand growth in mid-30s; industry bit supply growth in high-30s
- Targeting bit shipments to grow close to industry bit demand growth rate
- Reduced wafer starts by approximately 10%, an increase from 5% previously
"The overall NAND market remains oversupplied from the accelerated supply growth driven by the industry transition from 2D NAND production to 3D NAND," stated the company. "While we still believe the NAND industry supply is growing above demand this year, the market is showing signs of increased elasticity stemming from recent price declines. We are optimistic that the overall NAND market will start to stabilize in the second half of calendar 2019."
SSDs
- Strengthens SSD portfolio with launch of 9300 Datacenter NVMe SSDs for cloud and enterprise markets
- More than doubled revenue shipments of NVMe client SSD to large PC OEMs (built its own controller)
- QLC SSD bit shipments increased around 75% sequentially driven by growth of consumer NVMe SSDs.
DRAM
- 64% of overall company revenue in 3FQ19
- Sales down 19% Q/Q and 45% Y/Y
- ASPs down 20% Q/Q
- Shipment quantities relatively flat Q/Q
4FQ19 guidance
Global revenue is expected at $4.5 billion ± $200 million.
In calendar 2019, the firm is expected NAND bit growth in the mid-30% range compared to the high-30s expected by the industry. It targets its bit growth to approach that of the industry.
Long-term demand outlook for memory and storage is robust, driven by trends such as AI, autonomous vehicles, 5G and IoT.
Wait for a huge decline for FY19, with total revenue expected to be $23 billion on mid-range, down 24% from $30.4 billion in FY18, even if the manufacturer will continue to be the number one firm in the WW storage industry in term of revenue, in front of WD, Dell for storage only, and Seagate.
Subscribe to our free daily newsletter
