Micron Technology: Outstanding Quarterly Results Overshadowed by Weak Guidance Due to Supply Bottlenecks

Micron Technology (MU) presented its scheduled Q4 2021 and full 2021 fiscal year financial results. Key Financial Highlights for Q4 2021 are as follows: Revenue rose to $8.27 billion against $7.42 billion in the previous quarter and $ 6.06 billion on an annual basis. GAAP earnings were $2.72 billion, or $2.39 per diluted share. Non-GAAP net income was $2.78 billion, or $2.42 per diluted share. Operating cash flow increased to $3.88 billion versus $3.56 billion in the previous quarter and $2.27 billion in the same period last year.

Key indicators for the entire fiscal 2021: Revenue was $ 27.71 billion versus $21.44 billion in the previous year. GAAP earnings were $5.86 billion, or $5.14 per diluted share. Non-GAAP earnings were $6.98 billion, or $6.06 per diluted share. Operating cash flow was $12.47 billion, up from $8.31 billion in the prior year.

Yesterday was a really complex day for global equity markets, therefore attributing MU’s price correction solely to its disappointing guidance would not be fair. Having said that, guidance for fiscal Q1 revenue of $7.45 billion-$7.85 billion was well short of consensus for $8.49 billion, and EPS forecast at $2.00-2.20 trailed expectations for $2.48. The company is expecting a strong fiscal year, but CEO Sanjay Mehrotra said during yesterday’s conference call that "in the near term, our FQ1 bit shipments will decline modestly in both DRAM and NAND from very strong levels in FQ4. Many PC customers are lowering their expectations of their memory and storage purchases going forward due to shortages of non-memory components that are needed to complete PC builds", which also sounds entirely credible, given the well-known circumstances of the lingering global microchip shortages.

Bottom Line: Micron's outstanding Q4 results. In fiscal 2021, the company confirmed its leadership in DRAM and NAND technologies, reaching record revenues in many direct and adjacent markets, and initiated quarterly dividend payments. However, current market supply bottlenecks act as a headwind to its near-term performance.