Micron Mixed Q1 Results: AI Optimism Meets Market Challenges Amid 13 Percent Post-Market Drop

Micron Technology, Inc. ($MU) designs, manufactures, and sells memory and storage solutions globally, serving markets across the U.S., Asia Pacific, Europe, and more. Operating through four segments—Compute and Networking, Mobile, Embedded, and Storage—the company provides dynamic random access memory (DRAM) devices for high-speed data retrieval, non-volatile storage solutions, and re-writable memory products. These technologies, marketed under the Micron and Crucial brands, cater to data center, PC, graphics, networking, automotive, industrial, and mobile-device markets. Products are distributed through direct sales, independent representatives, retailers, and online channels, as well as partners. Founded in 1978, Micron is headquartered in Boise, Idaho.  

Company Reports Mixed Q1 Results, Projects Growth in Second Half of Fiscal Year

  The company has announced its financial results for the first quarter, exceeding EPS estimates but guiding below consensus for Q2 and projecting a return to growth in the latter half of the fiscal year.  

Q1 2025 Financial Highlights

 

• Earnings Per Share (EPS): $1.79 vs. $1.75 expected.
• Revenue: $8.71 billion, in line with expectations.
• Gross Margin (Non-GAAP): 39.5%, a significant improvement from 0.8% year-over-year.
• Operating Margin (Non-GAAP): 27.5% vs. -20.2% year-over-year.
• Capital Expenditures: $3.13 billion, slightly above $3.08 billion in the previous quarter.

Q2 2025 Guidance

 

• EPS: $1.16-$1.36 vs. $1.95 expected.
• Revenue: $7.7-$8.1 billion vs. $8.96 billion expected.
• Gross Margin: 37.5%-39.5%.

Executive Commentary

  "While consumer-oriented markets are weaker in the near term, we anticipate a return to growth in the second half of our fiscal year," the company stated. "We continue to gain share in the highest margin and strategically important parts of the market and are exceptionally well positioned to leverage AI-driven growth to create substantial value for all stakeholders."  

Post-Market Update

  Following the earnings report, Micron's stock price faced pressure in after-hours trading, dropping 13%. This decline reflects investor concerns over the company’s weaker-than-expected guidance for Q2 and ongoing challenges in consumer markets.  

Outlook

  Despite near-term challenges in consumer-focused markets, the company remains optimistic about the second half of the fiscal year, driven by its strategic positioning in high-margin segments and its ability to capitalize on AI-driven opportunities. This outlook signals confidence in its long-term growth trajectory, even as it navigates short-term headwinds in revenue and gross margins.  

Source

  Nasdaq. "After-Hours Earnings Report December 18, 2024: MU, LEN, EPAC, WS, MLKN, SCS." Nasdaq, 18 Dec. 2024.