MU Q2 Earnings Beat Estimates: Will Strong Guidance Uplift the Stock?

Micron Technology MU reported second-quarter fiscal 2025 earnings of $1.56 per share, beating the Zacks Consensus Estimate by 9.1%. MU’s second-quarter fiscal 2025 earnings skyrocketed 271% year over year from the year-ago quarter’s earnings of 42 cents.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Micron’s revenues increased 38.3% year over year to $8.05 billion and beat the Zacks Consensus Estimate by 1.97%. The top line was driven by robust demand for its high bandwidth memory (HBM) products.Followed by the strong fiscal second-quarter performance, MU released an upbeat third-quarter fiscal 2025 guidance. Micron’s forecast for fiscal third-quarter top and bottom lines are above the Zacks Consensus Estimate.These factors can aid in the recovery of the Micron stock, which declined 6.5% in the past year, underperforming the Zacks Computer and Technology sector’s return of 5.2%.Micron Technology, Inc. Price, Consensus and EPS Surprise  Micron Technology, Inc. price-consensus-eps-surprise-chart | Micron Technology, Inc. QuoteMicron Q2 Top-Line DetailsTechnology-wise, DRAM revenues of $6.1 billion, accounting for 76% of the total revenues in the fiscal second quarter, increased 47.3% year over year while decreasing 4.3% sequentially. The company experienced record demand for data center DRAM, including HBM, with HBM revenues crossing $1 billion.NAND revenues of $1.86 billion, representing 23% of the total revenues, were up 18.4% year over year but decreased 17.2% quarter over quarter.Other revenues were $75 million in the reported quarter, down from $99 million in the year-ago quarter and up from $68 million in the previous quarter.Business segment-wise, revenues of $4.56 billion from the Compute and Networking Business Unit soared 109% from the year-ago quarter and 4% sequentially, driven by a more than 50% sequential increase in HBM revenues.Revenues of $1.07 billion from the Mobile Business Unit declined 33% on a year-over-year basis and 30% on a quarter-over-quarter basis due to customer inventory adjustments.The Embedded Business Unit’s revenues were $1.03 billion, down 8% from the year-ago period and 3% from the previous quarter. Revenues from the Storage Business Unit, comprising solid-state drive NAND components, totaled $1.4 billion, up 54% year over year, while declining 20% sequentially.MU’s Q2 Operating DetailsFor the fiscal second quarter, MU posted a non-GAAP gross profit of $3.05 billion, representing a robust improvement from the year-ago quarter’s $1.16 billion. However, Micron’s non-GAAP gross profit declined 11.3% sequentially.The fiscal second-quarter non-GAAP gross margin of 37.9% improved from the year-ago quarter’s 20%. The non-GAAP gross margin declined 160 basis points from the previous quarter’s 39.5%.Non-GAAP operating expenses were $1.046 billion compared with the previous quarter’s $1.047 billion and the year-ago quarter’s $959 million.Micron’s non-GAAP operating income of $2.01 billion was lower than the previous quarter’s non-GAAP operating income of $2.4 billion. It also shows significant improvements from the year-ago quarter’s non-GAAP operating income of $204 million.The non-GAAP operating margin came in at 24.9%. MU posted a non-GAAP operating margin of 27.5% for the previous quarter and it had a non-GAAP operating margin of 3.5% in the year-ago quarter.Micron’s Balance Sheet & Cash FlowMU exited the reported quarter with cash and investments of $8.22 billion compared with $7.58 billion at the end of the prior quarter. It ended the quarter with total liquidity of $12.1 billion, up from the previous quarter’s $11.2 billion.Micron’s total debt, as of Feb. 27, 2025, was $14.4 billion compared with the $13.7 billion witnessed at the end of the previous quarter.The company generated an operating cash flow of $3.94 billion in the fiscal second quarter. It spent $3.09 billion on capital expenditure in the quarter, resulting in an adjusted free cash flow of $857 million. MU paid out $261 million in dividends but repurchased no share in the second quarter of fiscal 2025.MU’s Q3 OutlookMicron provided its guidance for the third quarter of fiscal 2025. The company anticipates revenues of $8.80 billion (+/-$200 million) in the fiscal third quarter. The Zacks Consensus Estimate is pinned at $8.47 billion.For the fiscal third quarter, MU projects a non-GAAP gross margin of 36.5% (+/-100 basis points). Operating expenses on a non-GAAP basis are estimated to be $1.13 billion (+/-$15 million).Adjusted EPS is anticipated to be $1.57 (+/- 10 cents). The consensus mark is pegged at a loss of $1.48 per share.Zacks Rank & Stocks to ConsiderCurrently, MU carries a Zacks Rank #4 (Sell).ACM Research ACMR, Fabrinet FN and Marvell Technology MRVL are some better-ranked stocks in the broader Zacks Computer and Technology sector. ACMR and FN sport a Zacks Rank #1 (Strong Buy) each, and MRVL carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus mark for ACMR’s 2025 earnings has been revised upward by 19.4% to $2.15 per share over the past 30 days, indicating a 4.87% year-over-year decrease. ACM Research’s shares have declined 10.8% in the past year.The consensus mark for FN’s 2025 earnings has been revised downward by four cents to $10.31 per share over the past 30 days, indicating a 16.10% year-over-year increase. Fabrinet’s shares have gained 12.6% in the past year.The consensus mark for MRVL’s 2025 earnings has been revised upward by four cents to $2.75 per share over the past 30 days, indicating a 75.16% year-over-year surge. Marvell’s shares have gained 5.9% in the past year.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Micron Technology, Inc. (MU): Free Stock Analysis Report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report ACM Research, Inc. (ACMR): Free Stock Analysis Report Fabrinet (FN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks