Boston, MA 01/13/2013 (wallstreetpr) – The latest results from Micron Technology Inc (NASDAQ:MU) reflect how acquisitions can play a big role in a company’s future; and in a way how fate can help companies.
Micron’s Game Changer:
Micron is a global manufacturer of semiconductor devices particularly memory devices. These find applications in PCs, mobiles like smartphones, servers and tablets. Just some time back the company was struggling on account of oversupply in the memory devices market and a fast changing trend from PCs to smartphone. The oversupply and reduction in demand from PC makers resulted in falling prices and many companies could not survive. One of them was Elpida Memory Inc. Micron Technology Inc (NASDAQ:MU) sensed an opportunity and was quick to take over the ailing company. Analysts were skeptical.
At the same time there was a devastating fire at one of the competitor’s factory complex. The oversupply position turned on its head though there was no resultant undersupply. Prices improved and as the field was left with three main competitors, they were able to reap the benefits. Elpida not only added to Micron’s capacity but also opened the market for mobile devices to Micron. Smartphones saw a spate of new launches to coincide with the December festival shopping fest. Micron which had been struggling to get an entry was suddenly one of the biggest suppliers.
The Results:
The effect of these issues on the financial results has surprised even the analysts. Revenues for the first quarter of 2014 ending November 28, 2013 were $4.04 billion as compared to $2.84 billion reported for 4Q2013. The rise was 42% q-on-q basis and a massive 120% on y-on-y basis. The revenues also beat analysts’ expectations of $3.72 billion by a vast margin. Micron Technology Inc (NASDAQ:MU) also beat the analysts’ expectations of EPS. Against expectations of $0.43, the company recorded EPS of $0.77.
An investment of $2 billion in July 2013 in Elpida as well as a fire in a competitor’s plant changed the fortune of Micron. Investors will be hoping that the company will also continue to show such good results in future.
