-=Micron (MU) reported earnings on Thur 26 Sept 19 (a/h)

•  The stock was up over 50% in 2019 heading into the report. 

Micron beats by $0.08, beats on revs; guides Q1 EPS in-line, revs above consensus; Sees FY20 CapEx in the range of $7-8 bln

Reports Q4 (Aug) earnings of $0.56 per share, excluding non-recurring items, $0.08 better than the S&P Capital IQ Consensus of $0.48 (Guidance $0.38-0.52); revenues fell 42.3% year/year to $4.87 bln vs the $4.56 bln S&P Capital IQ Consensus (Guidance $4.3-4.7 bln).

• Gross Margin 30.6% (Guidance 27.5-30.5%)
• Operating Expenses $745 mln (Guidance $760-810 mln)
• Free Cash Flow $263 mln.

Co issues guidance for Q1, sees EPS of $0.39-0.53, excluding non-recurring items, vs. $0.49 S&P Capital IQ Consensus; sees Q1 revs of $4.8-5.2 bln vs. $4.78 bln S&P Capital IQ Consensus.

• Gross Margin in the range of 25-28%.
• Sees CapEx in the range of $7-8 bln; Co had said it would be down meaningfully from the $9 bln in 2019.

"We are encouraged by signs of improving industry demand, but are mindful of continued near-term macroeconomic and trade uncertainties. As markets recover, Micron is well positioned to address the robust secular demand for memory and storage solutions."

Micron -- DRAM and NAND Outlooks

DRAM

• CY-19 industry bit demand growth remains unchanged at mid-teens, with supply exceeding demand
• CY-20 industry bit demand growth of high-teens to 20%, above supply growth of only mid-teens
• Long-term bit demand growth CAGR of mid-to-high teens

NAND

• CY-19 industry bit demand growth in the low-to-mid 40% range, which will exceed bit supply growth of approximately 30%
• CY-20 industry bit demand growth of high-20s to low-30% range, with supply growing somewhat below demand
• Long-term bit demand growth CAGR in low-30% range

Micron- Huawei Commentary

In the fiscal fourth quarter, sales to Huawei declined sequentially and were down meaningfully from the levels we anticipated prior to the addition of Huawei to the Entity List

We have applied for licenses with the U.S. Department of Commerce that would allow us to ship additional products, but there have been no decisions on those licenses to date

If the Entity List restrictions against Huawei continue and we are unable to get licenses, we could see a worsening decline in our sales to Huawei over the coming quarters

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