Micron: Fiscal 1Q10 Financial Results

in US$ millions)	1Q09	1Q10
Revenues	1,402	1,740
*Growth*		+24%
Net income (loss)	(718)	204

Micron Technology, Inc. announced results of operations for its first quarter of fiscal 2010, which ended December 3, 2009.

For the first quarter of fiscal 2010, the company had net income attributable to Micron shareholders of $204 million, or $0.23 per diluted share, on net sales of $1.74 billion. These results compare to a loss of $100 million, or $0.12 per diluted share, on net sales of $1.3 billion for the fourth quarter of fiscal 2009 and a loss of $718 million, or $0.93 per diluted share, on net sales of $1.4 billion for the first quarter of fiscal 2009. Amounts and presentations for periods prior to fiscal 2010 have been recast for the effects of the adoption of new accounting standards for convertible debt and noncontrolling interests.

“We realize there are still challenges in the global economy, but our team members deserve a lot of credit for generating positive operating cash flow throughout the downturn,” said Steve Appleton, Micron Chairman and CEO. “Our technology, cost competitiveness and strong balance sheet will provide a great foundation for taking advantage of improving market conditions.”

Revenue from sales of DRAM products increased 50 percent in the first quarter compared to the fourth quarter due to a 25 percent increase in sales volume and a 21 percent increase in average selling prices. Revenue from sales of NAND Flash products increased 21 percent in the first quarter compared to the fourth quarter due to a 16 percent increase in sales volume and a five percent increase in average selling prices. The company’s gross margin on sales of memory products improved from 12 percent in the fourth quarter of fiscal 2009 to 27 percent in the first quarter of fiscal 2010 due primarily to the increases in average selling prices.

The company generated $326 million in cash flows from operations in the first quarter of fiscal 2010 and ended the quarter with cash and investments of approximately $1.6 billion.

Comments

Abstracts of the earnings call transcript:

Ron Foster, CFO:

"NAND production cost per bit increased 8% in the first quarter compared to the previous quarter. As our 34 nanometer process technology achieved mature yields. NAND cost reductions in a fiscal second quarter are expected to be in the high single digits again and bit productions forecast to be relatively flat compared to the first quarter as we have reached full production on our 34 nanometer process and prepared transition to the next process note."

Mark Adams, VP WW Sales:
"We are seeing improved sale through year-over-year and that’s remains bullish heading into the new calendar year. Great component pricing for NAND memory increased in Q1. Coming off an increasing ASP market for most of 2009 in NAND we managed to drive quarter-over-quarter NAND ASPs up 14% in Q1 by sales of most of our product yield OEM customers.

"Although quarter they were seeing NAND ASPs down roughly 10% this is well with our expectations given the consumer driven seasonality of the flash memory. We continue to see the market migrate to higher density chips then we fill bit consumption will continue to grow throughout 2010."