Does Micron's New and Improved Price Make Sense After Earnings?

Yahoo Finance ·

Computer memory specialist Micron ( MU +11.24% ) stock surged 19.2% Thursday morning after crushing analyst forecasts for fiscal Q3 earnings. Wall Street had expected Micron to earn $20.78 per share, adjusted for one-time items, on $35.8 billion in quarterly sales. Micron actually earned $25.11 per share, and its sales quadrupled year over year to $41.5 billion. GAAP earnings for the quarter weren't quite as good as the non-GAAP number noted above, but were still impressive: $24.67 per share, up 104% sequentially from Q2, and up 1,368% year over year! So Micron's not just selling more computer memory chips; it's making more profit on every chip it sells.

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Micron (MU)'s third-quarter results produced a large surprise: EPS $25.11 (expected $20.78) and revenue surged to $41.5 billion, roughly 4x year‑over‑year. GAAP EPS also rose to $24.67, a substantial quarter‑on‑quarter increase, signaling a recovery in profitability rather than a simple one‑off. The results imply simultaneous improvement in memory prices and shipments and margin recovery, which could mark a cyclical inflection in the memory market and prompt a revaluation of company/industry valuations. However, uncertainty remains over the sustainability of these trends, customers' inventory and demand fluctuations, and whether higher costs will be passed through to final products—factors that leave future share performance and market conditions uncertain.

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