Micron Technology Inc. reported fiscal fourth-quarter results that beat analyst expectations, as demand for artificial intelligence infrastructure continued to drive sales of its memory chips. The company posted earnings before certain costs such as stock compensation of $33.42 per share, ahead of the $31.61 per share Wall Street had forecast. Revenue for the quarter rose 379%, to $54.23 billion, topping the $51.07 billion analyst estimate. Net income climbed to $37.7 billion, up from $3.2 billion a year earlier.
Chairman and Chief Executive Sanjay Mehrotra said the quarter and full year set records for Micron, which he described as one of the biggest beneficiaries of the AI boom. He said AI is becoming super intelligence and that memory enhances that intelligence and the competitiveness of customers' platforms. Mehrotra said Micron is raising its investments in technology, products and manufacturing, and that strategic customer agreements give the company confidence in the durability of its financial performance.
Micron projected an even stronger first quarter, guiding to earnings of $38.15 per share on sales of $61.5 billion at the midpoint of its range. Wall Street is looking for $35.40 per share on revenue of $57 billion. The company's stock moved little in after-hours trading, a muted reaction that followed a gain of more than 500% over the past 12 months. Micron has been selling all the memory chips it can make, often months before the products reach customers, feeding a global supply crunch that has pushed prices higher for consumer electronics including Apple Inc.'s MacBooks and iPads and Microsoft Corp.'s Xbox consoles.
Zacks Investment Research analyst Andrew Rocco said Micron now holds both unprecedented pricing power and margins. He pointed to gross margins of 87% as evidence of that pricing power and said revenue visibility is clear because of locked-in long-term contracts. Rocco also said Micron's stock has tended to gain in the weeks after earnings rather than the day after, and that its immediate post-earnings performance has been mixed.
Micron is the only U.S. company able to supply chip and server makers with high-bandwidth memory, or HBM, products, which provide the dynamic random-access memory AI workloads need to retain context and function. It is building two U.S. manufacturing facilities expected to cost more than $250 billion; the largest, in Clay, New York, broke ground in January, and a smaller facility in Boise, Idaho, is expected to come online next year. DRAM revenue rose 343% to $39.8 billion, accounting for almost three-quarters of total sales.
On a conference call with analysts, Mehrotra said Micron has a strong roadmap for future HBM products and is working with Nvidia Corp. on what he said would be the world's first custom HBM implementation. Micron's main memory competitors are South Korea's SK hynix Inc. and Samsung Electronics Co. Ltd., which hold larger shares of the HBM segment, though Micron's market capitalization has grown past $1.2 trillion. Mehrotra also said the company raised salaries or bonuses for every employee in the last fiscal year, averting a threatened strike at a major factory in Taiwan, where workers had sought higher compensation after SK hynix and Samsung negotiated bonuses exceeding $500,000 in some cases.
More company and startup news from TechManNews.
