Will Micron Earnings Get an Apple-Led Lift?http://www.fool.com/investing/general/2014/01/06/will-micron-earnings-get-an-apple-led-lift.aspx Dan Caplinger
January 6, 2014
Micron Technology (NASDAQ: MU) will release its quarterly report on Tuesday, and shareholders in 2013 saw their shares more than triple on hopes that the memory maker has finally solidified its status as a major player in the mobile and PC DRAM markets. In particular, its acquisition last year of Elpida has allowed it to benefit more from Apple's (NASDAQ: AAPL) success, and interesting developments in its often-contentious relationship with Rambus (NASDAQ: RMBS) could make Micron's business a little easier to handle, at least on the litigation front.
After years of pricing pressure and other structural problems in the memory market, Micron finally appears to have survived to better times for its core product offerings. Both traditional PC and mobile-device makers have turned to memory for new purposes, and Micron hopes to reap more than its fair share of the resulting business from manufacturers hungry to offer the latest storage and efficiency-enhancing technology. Let's take an early look at what's been happening with Micron Technology over the past quarter and what we're likely to see in its report.
Stats on Micron Technology
Will Micron earnings live up to the hype?
Micron actually came into the quarter with a rocky start, as its August-quarter earnings report sent the stock falling sharply despite solid revenue growth from both the Elpida acquisition and its buyout of a majority stake in Taiwan's Rexchip. The moves greatly enhanced Micron's ability to manufacturer DRAM chips, and that should translate to greater pricing power and more availability for customers, especially legacy Elpida-customer Apple.
But another key opportunity for Micron lies in NAND flash memory. That's a higher-margin business with even higher growth rates in demand compared to DRAM, as many device makers have integrated flash memory as a key or even sole storage component. Micron expects strong growth for both NAND and DRAM, but the more profitable opportunity from the NAND side of the business should make it a key strategic priority. The company's own solid-state drive business will also be an important catalyst for NAND growth at Micron going forward.
Even with its impressive gains, Micron continues to get attention from well-known hedge funds and other institutional investors. In November, Greenlight Capital's David Einhorn cite