Micron (mu.).o) released its financial results for the first quarter of fiscal year 2024 (as of November 2023) after the U.S. stock market on the morning of December 21, 2023, Beijing time, with the following key points:
1. Overall performance: revenue & gross profit margin exceeded expectations。Micron Inc. Q1 fiscal 2024Total revenue of 47$26, up 15 year-on-year7%, exceeding market expectations (45.).$3.7 billion).。The recovery in revenue was mainly driven by the year-on-year growth of DRAM and NAND businesses. Micron achieved in the first quarter of fiscal 2024Net profit - 12$3.4 billion. With revenue and gross margin recovering, the company's losses continued to narrow.
2. Sub-business situation: DRAM and NAND, both price increases。DRAM and NAND make up 98% of the company's revenue**, with double-digit recoveries in both businesses during the quarter. In terms of breakdown, the company's DRAM and NAND have improved by different margins in this quarter, and the industry situation is improving.
3. Next quarter outlook: operating income for the second quarter of fiscal 2024 will be $5.1 billion to $5.5 billion (up 12.5 billion year-on-year.)1%), beating the consensus estimate (49.).$9.4 billion);Quarterly gross margin (non-GAAP) was 115% to 145%, gross profit margin continued to improve sequentially.
On the whole, the core data of Micron's financial report exceeded expectations。Revenue and gross profit margin both exceeded expectations, and the company's losses also narrowed further. In the case of the recovery of downstream products, the company's DRAM and NAND businesses have double-digit growth.
Although the inventory data for the quarter is still relatively high, the company has not continued to write down the inventory, which also indicates that the company is confident in the current inventory situation。On the whole, the company's business situation has gradually come out of the trough.
Looking at the company's guidance for the next quarter, it is expectedRevenue of $5.1 billion to $5.5 billion for the second quarter of fiscal 2024, beating consensus expectations (49$9.4 billion);Quarterly gross margin (non-GAAP) was 115% to 145%, also exceeding market expectations (64%）With the recovery of the first end of the product, it directly drives the recovery of the company's gross profit margin.
For the industry, the company believes that the demand for DRAM and NAND will increase by double digits in 2024. In the case of the recovery of the industry, the company's performance is also expected to continue to improve. The earnings report exceeded expectations, which will support the stock price in the short term.
The storage industry is distinctly cyclical. Although the company still has a loss of more than 1 billion yuan in the current quarter, the stock price has already included some expectations of recovery. From the perspective of the elongated cycle, the company's current market value corresponds to about 20 times the PE, which is not cheap. The company's share price continues to break new highs and needs to exceed expectations.
The following is Dolphin's specific analysis of Micron's financial report:
1. Overall performance: revenue & gross profit margin exceeded expectations
1.1. Operating income
Micron's total revenue for the first quarter of fiscal 2024 was 47$2.6 billion, an increase of 157%, exceeding market expectations (45.).$3.7 billion).。Revenue finally rebounded in the quarter, mainly due to the year-on-year growth of the company's core business, DRAM and NAND. After a period of decline in the early stage, DRAM and NAND have both ushered in.
1.2. Gross profit situation
Micron achieved a gross profit of -0$3.5 billion, gross profit returned to the breakeven line.
Among them, the company's gross profit margin for the quarter was -07%, the rebound in gross profit margin is mainly driven by the first and product portfolio. Combined with the company's current inventory, there are still 827.6 billion, at a high water level, which to a certain extent limits the rapid recovery of gross profit margin.
Although Micron's current inventory is still at a relatively high position, the company has not carried out inventory write-downs in the past two quarters. With the improvement of the industry, the company is confident in its current inventory situation.
Combined with the company's guidance for the next quarter, the company's gross profit margin is also expected to further recover to around 13%.
1.3. Operating expenses
Micron's operating expenses for the first quarter of fiscal 2024 were 110.8 billion US dollars, a year-on-year increase of 0.8 billion7%。The operating expense ratio was stable at 23 in the quarter4%。
Among them, the breakdown of expenses is as follows:
1) Sales and administrative expenses: 2$6.3 billion, a year-on-year increase of 48%。The selling and administrative expense ratio was 56%, down 05pct, the increase in proportion is mainly due to the increase in revenue. There is a certain relationship between selling expenses and revenue performance, while administrative expenses are relatively rigid
2) R&D expenses:84.5 billion US dollars, down 05%。R&D expenses are the largest on the company's operating expense side, and the R&D expense ratio remained at 17 in the quarter9%。As a technology company, the company attaches more importance to R&D capabilities. In the case of the company and the industry, Micron's R&D expenses have also begun to rise month-on-month
1.4. Net profit
Micron achieved a net profit of -12 in the first quarter of fiscal 2024$3.4 billion, the loss continued to narrowIn the quarter, the company's net profit margin was -261%。The company's loss narrowed in the quarter, mainly driven by the recovery of downstream product volume and price.
This quarter has been the third consecutive quarter of quarter-on-quarter recovery, and the company has passed the trough period of performance.
Second, the business situation: DRAM and NAND, both price increases
From the previous Micron depth of Dolphin Jun, I watched "Micron: Is the memory chip manufacturer finished in winter?".The company's biggest revenue is memory chips. According to the latest financial report, DRAM and NAND are still the company's most important revenues**, accounting for 98% of the total. Therefore, the changes in Micron's business mainly depend on the DRAM and NAND business.
2.1dram
DRAM is the company's largest revenue**, accounting for more than 70%. The company's DRAM business revenue rebounded to 34 in the quarterUS$2.7 billion, up 21.1 billion year-on-year2%。This is mainly due to the impact of the recovery of the industry, the company's DRAM business is driven by the rise in product volume and price.
Micron's DRAM business grew 24% sequentially in the quarter4%, its ** volume has increased by more than 20%, while ** still has a low single-digit increase.
Dolphin Jun believes that the DRAM industry has picked up this quarter, and the overall product has improved to a certain extent. Taking DDR4 8G (1G*8) ETT as an example, the product** has gone from a low of 1 in early September 202302 USD, back to 1Around $2.
2.2nand
NAND is the company's second largest revenue**, accounting for nearly 3 percent. The company's NAND business revenue for the quarter was 12US$3 billion, an increase of 11 percent year-on-year5%。Although the growth rate of NAND is not as good as that of DRAM, the industry is also on the trend of recovery.
Micron's NAND business grew 21%。Although NAND shipments declined by about 15% in the quarter, the average price of the company's NAND products increased by about 20%.
From the perspective of NAND's market, taking NAND Flash 32GB 4G*8 MLC as an example, the product will be in the first 2 of September 2023$063, and now ** has also risen to 207 USD.
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