How Has MU Performed?


Dec. 26 2017, Updated 11:10 a.m. ET

What triggered net sales growth in 2017?

Micron Technology’s (MU) net sales declined 23% in 2016 before gaining 64% in 2017. The decline in 2016 was due to prices offsetting the impact of higher sales volumes of its computing and networking business, storage business, mobile business, and embedded business units. In 2017, higher sales volume from every business unit led to the growth. The computing and graphics and mobile markets recorded a decline in 2016 and maintained a flat growth rate in 2017. SSDs and other storage markets maintained a flat growth rate in 2016 and 2017. Automotive, industrial, medical, and other embedded markets recorded growth in 2016 followed by a flat growth rate in 2017. The server market recorded a decline in 2016 before growing in 2017. Every geographic location recorded a decline in 2016 before growing in 2017.

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What led to the diluted EPS growth in 2017?

Gross margin went down 52% in 2016 before going up 237% in 2017. Operating expenses rose 5% and 10% in 2016 and 2017, respectively. As a result, operating income went down 94% in 2016 before growing 3,393% in 2017. Other expenses have increased in both years due to higher interest and other expenses. Overall, net income fell 98% in 2016 followed by 8,458% growth in 2017. Diluted EPS fell 98% in 2016 before gaining 8,167% in 2017. Free cash flow turned negative in 2016 before recovering in 2017.

The First Trust NASDAQ Semiconductor ETF (FTXL) has exposure to MU. It has a PE of 19x and a dividend yield of 0.4%. The PowerShares Dynamic Semiconductor (PSI) has exposure to MU. It has a PE of 17.6x and a dividend yield of 0.5%.

In the next part, we’ll discuss MU’S 1Q18 results and performance versus its peers and broad indexes like the S&P 500 (SPX-INDEX) (SPY), the Dow Jones Industrial Average (DJIA-INDEX) (DIA), and the NASDAQ Composite (COMP-INDEX) (ONEQ). In the next part, we’ll also discuss the stock’s outlook.


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