Micron Technology
According to Micron CEO Steve Appleton, the back-to-school season was more delayed than weak, which would translate into positive news for the entire technology sector in coming months. Moreover, weak sales of laptops and desktops may be the result of strong demand for tablet computers and smartphones, cannibalizing the more traditional types of computing hardware. That would be a negative for systems builders Dell
Given these puts and takes, Micron's fourth quarter was predictably strong:
Line Item |
Q4 2009 |
Q4 2010 |
Year-Over-Year Change |
---|---|---|---|
Revenue |
$1.3 billion |
$2.5 billion |
92% |
Earnings per Share |
-$0.12 |
$0.32 |
Large % |
Operating Cash Flow |
$357 million |
$1.1 billion |
208% |
Source: Micron press release.
The memory industry consolidated post-haste in the lean years of 2008 and 2009, and as part of that trend, Micron is now the proud owner of Numonyx, the former flash memory joint venture between Intel
It's also a remarkably cooperative industry these days; the ink is still drying on a 10-year cross-licensing agreement between Micron and Samsung that gives both companies access to the memory patent portfolios of the other, and also sends Micron $275 million in license payments during the coming quarters. If market leader Samsung feels a need to do all of that, Micron is surely sitting on some impressive and valuable technology.
Product prices are falling, as always, but demand for memory chips is stronger than you might have expected. Micron is a leader in the field, trades at just 4 times trailing earnings, and looks like a tremendous value play today.
Keep an eye on Micron by adding the stock to My Watchlist.