Nowadays, integrated circuits, also known as microchips, power many of our most beloved gadgets (computers, mobile phones, etc.).
So, today we’re going to look at Micron Technology (MU), one of the largest producers of memory chips in the world. Micron just reported strong Q4 results, but let’s see if MU can keep up the momentum heading into 2015.
Company Overview
Micron Technology is just over 35 years old, but in the semiconductor industry, that’s ages. In the dark ages, Micron Technology’s single product was a 64-kilobyte memory card that could only contain the amount of information that is in half of a newspaper.
Over the years, MU has expanded the capacity of its memory chips hundreds of thousands of times over and has broadened out into chips that can power a whole host of products. Currently, MU employs over 30,000 worldwide across four continents and brings in over $9 billion in sales per year.
Earnings Buzz
After the closing bell on Thursday, MU announced better-than-expected results for the fourth quarter. Micron continues to see improving economies of scale in its DRAM chip business, as well as rebounding demand from personal computer makers.
Interestingly enough, Q4 profit fell 33% over last year, but that’s because Micron’s Elphida Memory boosted the year ago quarter’s earnings. Excluding special items, adjusted net income climbed 5.3% year-on-year to $961 million, or 82 cents per share, beating the consensus earnings-per-share estimate by a penny.
Meanwhile, Micron’s revenues jumped 49% year-on-year to $4.23 billion, also topping the $4.15 billion consensus sales estimate. Micron’s revenue outlook for the fiscal first quarter is what really impressed Wall Street. This quarter, MU anticipates revenue between $4.45 billion and $4.70 billion — well above analyst expectations of $4.39 billion in sales.
Current Ratings
For the past 12 months running institutional buying pressure has remained strong for this “moderately-ranked” stock. So, MU receives an “A” for its Quantitative Grade.
Meanwhile, Micron has made progress in turning around its balance sheet. MU currently receives “As” for sales growth, earnings growth, return on equity and cash flow. Micron also earns “Bs” on its track record of earnings surprises and analyst earnings revisions.
However, there is room for improvement in terms of operating margin growth (C) and earnings momentum (F). So MU receives a “B” for its Fundamental Grade but is still a strong stock to buy overall.
More From InvestorPlace
- 3 Robust Stocks Worth the High Prices
- Count on Jamba to Juice Your Portfolio
- 4 ETFs to Expose Your Portfolio to Emerging Markets
Louis Navellier is a renowned growth investor. He is the editor of five investing newsletters: Blue Chip Growth, Emerging Growth, Ultimate Growth, Family Trust and Platinum Growth. His most popular service, Blue Chip Growth, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
