Micron Technology, Inc. (NASDAQ: MU) stock fell over 12.1% in the last one week (Source: Finviz). The company has struggled to bounce back from falling demand for its memory products over the past year, after rising prices led many customers to build up supply of memory chips. Micron shares had reached their highest level since the dot-com bust of $64.66 on May 30, 2018, at the height of the memory chip boom, and then fallen 56% to $28.39 over the next seven months as inventory problems became more evident.
In the fourth quarter 2019, the company began mass production and volume shipments of the industry’s first 1Z products, giving Micron feature size leadership for DRAM. The company has also making good progress migrating more of the production to leading-edge nodes. The company entered fiscal 2019 with more than half of the bit production on 20 nanometer or older nodes. The company has ended the fiscal year with approximately three-quarters on 1X and beyond, with a meaningful portion on 1Y. The company is expanding clean room space in the Touching, Taiwan, site to support future node transitions of the existing wafer capacity, and the company expect output from this facility in calendar 2021.
MU in the fourth quarter of FY 19 has reported the adjusted earnings per share of 56 cents, beating the analysts’ estimates for the adjusted earnings per share of 51 cents, according to FactSet. The company had reported the adjusted revenue of $4.87 billion in the fourth quarter of FY 19, beating the analysts’ estimates for revenue of $4.59 billion.
Micron expects the adjusted earnings to be in the range of 39 cents to 53 cents a share on revenue expected to be in the range of $4.8 billion to $5.2 billion for the first quarter of 2020. Analysts surveyed by FactSet had forecast earnings to be of 53 cents a share on revenue to be of $4.8 billion on average, according to FactSet.
For Micron’s NAND outlook, the company expect the calendar 2019 bit growth to be slightly above industry supply growth, and in calendar 2020, the company expect Micron’s bit supply growth to be significantly below the industry demand growth as the company transition a limited portion of the wafer starts to the first-generation replacement gate node and use inventory to support customer demand. Supply growth will also be impacted by the previously announced wafer start reductions of approximately 10%.