What is driving Micron Technology, Inc. (NASDAQ: MU) stock

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Micron Technology, Inc. (NASDAQ: MU) stock rose over 5% on 30th June, 2020 (as of 9:57 am GMT-4 · ; Source: Google finance) after the company posted better-than-expected fiscal second-quarter earnings and had a stronger outlook for the next quarter, despite some issues with the global supply chain due to the COVID-19 pandemic. The company has reported fiscal third-quarter net income of $803 million compared to $840 million, in the year-ago period.

For the third quarter, DRAM revenue was $3.6 billion, which formed 66% of total revenue. DRAM revenue increased 16% sequentially and 6% year-over-year. Bit shipments rose by approximately 10% sequentially. ASPs rose sequentially in the mid-single-digit percentage range. Q3 NAND revenue was about $1.7 billion, which formed 31% of total revenue. NAND revenue grew 10% sequentially and rose more than 50% year-over-year. Bit shipments increased in the lower single-digit percentage range sequentially. ASPs increased sequentially in the upper-single-digit percentage range.

The company has generated $2 billion in cash from operations in third quarter, which represents 37% of revenue. During the third quarter, the company incurred the  net capital spending of approximately $1.9 billion, which is approximately flat quarter-over-quarter. The company projects fiscal year 2020 capex to be approximately $8 billion. The company’s FY ’20 front-end equipment capex will still be down more than 40% from last year. The company has generated the free cash flow in the third quarter of $101 million, compared to $63 million in the prior quarter. At the end of the third quarter, the company’s inventory was $5.4 billion or 131 days versus 134 days last quarter. The company has ended the third quarter with total cash of $9.3 billion and total debt of $6.7 billion. Total liquidity was approximately $11.8 billion, which is up from $10.6 billion at the end of the second quarter.

MU in the three quarter of FY 20 has reported the adjusted earnings per share of 82 cents, beating the analysts’ estimates for the adjusted earnings per share of 75 cents, according to analysts surveyed by FactSet . The company had reported the adjusted revenue growth of 14 percent to $5.44 billion in the three quarter of FY 20, beating the analysts’ estimates for revenue of $5.27 billion.

Micron forecast adjusted fiscal fourth-quarter earnings to be in the range of 95 cents to $1.15 a share on revenue expected to be in the range of $5.75 billion to $6.25 billion. The analysts surveyed by FactSet, on average, were projecting fourth-quarter earnings to be of 79 cents a share on sales to be of $5.46 billion, according to FactSet.

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