MU Q3 2020 Earnings

Call Details

• Call Title: Micron Technology, Inc. Q3 2020 Earnings Call
• Date: June 29, 2020 at 8:30 PM UTC
• Management Team:
  • Farhan Ahmad (Vice President, Investor Relations)
  • Sanjay Mehrotra (President and CEO)
  • Dave Zinsner (Chief Financial Officer)

Call Summary

Financial Performance

• Total FQ3 revenue was $5.4B, up 13% sequentially and up 14% year over year on a reported non-GAAP basis.
• FQ3 DRAM revenue was $3.6B, representing 66% of total revenue, and was up 16% sequentially and up 6% year over year.
• DRAM bit shipments were up approximately 10% sequentially and DRAM ASPs were up in the mid-single-digit percentage range sequentially.
• FQ3 NAND revenue was $1.7B, representing 31% of total revenue, and was up 10% sequentially and up over 50% year over year.
• NAND bit shipments increased in the lower single-digit percentage range sequentially and NAND ASPs increased in the upper single-digit percentage range sequentially.
• Reported non-GAAP gross margin was 33.2% and reported non-GAAP operating income was $981M with an operating margin of 18%.
• Underutilization at the Lehi FAB reduced FQ3 results by approximately $155M, or 285 basis points, and is expected to be approximately $135M in FQ4.
• Cash from operations was $2.0B, representing 37% of revenue, and free cash flow was $101M for the quarter.

Guidance

• Non-GAAP revenue guidance for FQ4 is $6.0B plus or minus $250M for the 14-week quarter.
• Non-GAAP gross margin guidance for FQ4 is 35.5% plus or minus 150 basis points.
• Operating expense guidance for FQ4 is approximately $850M plus or minus $25M on a non-GAAP basis.
• Based on approximately 1.14B fully diluted shares, non-GAAP EPS guidance for FQ4 is $1.05 plus or minus $0.10.
• FQ4 tax rate is expected to be approximately 6%, and fiscal 2021 tax rate is expected in the high single-digit to low double-digit range.
• Net interest expense is expected to be approximately $30M in Q4 due to lower interest income from lower rates.