Micron's free cash flow, margins, DRAM sales jump post-Elpida
- In its first full quarter with Elpida on the books, Micron (MU) had FQ1 free cash flow of $838M, sharply above an FQ4 level of $385M and a big reversal from a year-ago level of -$302M. The increase came even though (thanks in part to Elpida) capex jumped to $669M (16.6% of revenue) from an FQ4 level of $332M.
- Contributing to the cash flow jump: Gross margin rose to 32% from 25% in FQ4 and a mere 12% a year ago. Growing scale, healthy DRAM pricing (aided by the SK Hynix fire), and Elpida's mobile DRAM sales (mobile DRAM generally carries higher margins than PC DRAM) likely helped out..
- The Elpida deal contributed to a 69% Q/Q increase in DRAM sales. NAND flash sales rose 8% Q/Q after growing 5% in FQ4, with an 11% volume increase offsetting a slight ASP decline.
- While revenue rose 120% Y/Y to $4.04B, SG&A spend rose 48% to $176M, and R&D spend 43% to $320M. Micron had $5.8B in debt at the end of FQ1, to go with $4.4B in cash/investments.
- MU +5.8% AH. NAND rival SanDisk (SNDK) +0.7%. CC at 4:30PM ET.
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