$Micron Technology(MU)$ stock soared nearly 5% in after-hours trading on Wednesday as the memory chip manufacturer released its Q1 fiscal year 24 results and full-year guidance, both of which exceeded market expectations.
In terms of performance, the company reported revenue of $4.73 billion, a 15.6% year-over-year increase, surpassing the previously raised guidance of $4.7 billion and the market consensus of $4.54 billion. This is an improvement from the previous quarter, which saw a 40% year-over-year decline.
Adjusted non-GAAP operating loss was $955 million, a 20.9% year-over-year reduction, lower than the market consensus of a $1.05 billion loss. Meanwhile, the operating cash flow for the period was $1.4 billion. These improvements were attributed to improved supply and demand dynamics and pricing following the guidance from the previous quarter.
Looking ahead, the company expects Q2 revenue to be between $5.1 billion and $5.5 billion, higher than the market expectation of $4.99 billion. The adjusted gross margin is projected to be between 11.5% and 14.5%. Adjusted loss per share is expected to be between $0.21 and $0.35, significantly better than the expected loss of $0.62.
Investment Highlights
1. The company's optimistic outlook for the industry's demand recovery in 2024 aligns with the optimistic expectations for the recovery of the PC and smartphone markets in 2024 from previous reports. MU anticipates a revival in the smartphone market and low to mid-single-digit growth in the PC market next year, with server shipments expected to grow in the mid-single digits. This is also positive for other manufacturers such as Western Digital (WDC), Apple (AAPL), Xiaomi Group-W (01810), and Samsung Electronics (SSNLF).
2. Next year's spending is expected to be slightly higher than in 2023, with capital expenditure ranging from $7.5 billion to $8 billion. Due to the high-bandwidth storage chip demand driven by AI applications, some investors hope that Micron Technology can withstand the slow recovery in other end markets with its AI-related products. Additionally, throughout 2024, the company's pricing is expected to remain strong, with prices continuing to rise, driving improved financial performance for the company.
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