Boston, MA 10/21/2013 (wallstreetpr) – Since earnings were reported on October 10, the actual performance of Micron Technology, Inc. (NASDAQ:MU) has caused a lot of confusion for investors and analysts alike. Some reports had Micron falling short of non-GAAP earnings estimates but beating overall revenue estimates while Bloomberg and Barron both stated that Micron had beat all earnings estimates.
To compound matters, Wells Fargo raised the stock target price from $11-$14 to $14-$17 even while the stock was downgraded to underperform. The conflicting information has caused consternation in the market and Micron has declined 8% since results were released. Stock price at the close of trading Friday stood at $17.03
However, despite all the confusion, the recent acquisitions of both Elpida and Rexchip by Micron have helped the chipmaker to boost its revenue and expand its DRAM business for both PCs and mobile devices. Elpida was a supplier for DRAM chips to Apple in the production of the iPhone 5S and having such a major client has helped to increase Microns market share to about 23%. Apple has projected sales of about 50 million iPhones in the fourth quarter so Micron should enjoy a strong performance there as well with higher revenue and profit margins.
Misfortunes at rival SK Hynix who suffered from a supply-disrupting fire at their factory, has also put Micron in a favorable position and growth of about 20% in the DRAM industry is expected to occur in the next two years. Micron is also doing well in its NAND segment where demand has been growing annually by about 43% and although NAND prices are expected to fall, there will be a corresponding decrease in costs so maintaining profit margins should not pose a problem at all. Increasing demand for solid state drives will also be boosting production of NAND and help Micron to increase revenue and profits.
