Micron: Is The Catbird Seat Shaking?

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Micron CEO Sanjay Mehrotra

Micron (MU) reports quarterly earnings Thursday after-hours. Analysts expect revenue of $8.25 billion and EPS of $3.34. The revenue estimate implies over 30% growth Y/Y. Investors should focus on the following key items.

Exceptional Top-Line Growth

Micron has shown strong quarterly revenue growth for about two years. The global economy appears to be on a good footing for now, and the industry’s demand/supply dynamics have also held up. Given Micron’s size (nearly $8 billion in quarterly revenue), 30% revenue growth sounds gaudy. Last quarter the company’s revenue was up about 40% on the continued delivery of products in the cloud server, enterprise server, and mobile markets.

Micron is making a shift from components and focusing on providing high-end solutions for clients. Such solutions include DRAM products for the mobile space, Managed NAND and SSDs for the cloud. Revenue from the Compute & Networking Business Unit (“CNBU”) was up 67% to nearly $4.0 billion. CNBU is its largest operating segment at over 50% of total revenue. The segment saw broad-based demand for memory solutions, with sales related to cloud servers and graphics memory doubling Y/Y.

Mobile Business Unit (“MBU”) sales are primarily related to mobile LPDRAM and managed NAND. Its revenue was up 55% Y/Y on the strength of high-value managed NAND products. Storage Business Unit (“SBU”) sales of Trade NAND products fell by double-digits due to a reallocation of supply to mobile and embedded markets. Read more:

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