MU ( Mirco Tech): A Company Looking to Rebound
Micron Technology:
Intro:
Mircon Technology (MU) has beaten its earnings report yet again. As we have noted from past report, this signals a surge in price as this is a growth stock. Currently, the current has suffered a slow decline and the bears have taken over. However, as noted historically, this is the general trend for the company.
10-K Report:
Business Combination:
The company acquired Inotera, which lead to adjustments for depreciation of property, plant, and equipment, interest expense, elimination of intercompany activities, and revaluation of inventories
Taxes:
The company currently has substantial deferred tax assets. The company plans to employ those benefits in the future terms to boost income. Income taxes for 2017 and 2016 included tax benefits of $28 million and $58 million, respectively, related to the favorable resolution of certain tax matters, which were previously reserved as uncertain tax positions.
Inventory:
Inventory is increased by 107 million in 2017 because of the reevaluation on the inventory acquired through the acquisition of Inotera. In accounting for the Inotera Acquisition, Inotera's work in process inventories were recorded at fair value, based on their estimated future selling prices, estimated costs to complete, and other factors, and was approximately $107 million higher than the cost of work in process inventory recorded by Inotera prior to the acquisition. The acquired inventory was sold in 2017.
PP&E:
The company decreased depreciation expense by increasing the useful life of their PP&E. Therefore, the company will net a higher income for the year.
As of August 31, 2017, we had net property, plant, and equipment of $6.52 billion in Taiwan, $5.26 billion in Singapore, $4.25 billion in the United States, $2.83 billion in Japan, $453 million in China, and $118 million in other countries. (See "Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Geographic Information" and "Item 1A. Risk Factors.")
Summary:
The company looks to rebound in the near future. Currently, the stock price may decrease even more as the sellers are not done unloading. A large sell-off is just beginning. However, the company has many accounting tools to increase its profits: the DTA, inventory adjustments, decrease in the useful life of its PP&E, and business combinations. MU looks promising for investors in the next few months. However, the market is looking to decrease in the next few months so it may be wise to wait.
Intro:
Mircon Technology (MU) has beaten its earnings report yet again. As we have noted from past report, this signals a surge in price as this is a growth stock. Currently, the current has suffered a slow decline and the bears have taken over. However, as noted historically, this is the general trend for the company.
10-K Report:
Business Combination:
The company acquired Inotera, which lead to adjustments for depreciation of property, plant, and equipment, interest expense, elimination of intercompany activities, and revaluation of inventories
Taxes:
The company currently has substantial deferred tax assets. The company plans to employ those benefits in the future terms to boost income. Income taxes for 2017 and 2016 included tax benefits of $28 million and $58 million, respectively, related to the favorable resolution of certain tax matters, which were previously reserved as uncertain tax positions.
Inventory:
Inventory is increased by 107 million in 2017 because of the reevaluation on the inventory acquired through the acquisition of Inotera. In accounting for the Inotera Acquisition, Inotera's work in process inventories were recorded at fair value, based on their estimated future selling prices, estimated costs to complete, and other factors, and was approximately $107 million higher than the cost of work in process inventory recorded by Inotera prior to the acquisition. The acquired inventory was sold in 2017.
PP&E:
The company decreased depreciation expense by increasing the useful life of their PP&E. Therefore, the company will net a higher income for the year.
As of August 31, 2017, we had net property, plant, and equipment of $6.52 billion in Taiwan, $5.26 billion in Singapore, $4.25 billion in the United States, $2.83 billion in Japan, $453 million in China, and $118 million in other countries. (See "Part II – Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Geographic Information" and "Item 1A. Risk Factors.")
Summary:
The company looks to rebound in the near future. Currently, the stock price may decrease even more as the sellers are not done unloading. A large sell-off is just beginning. However, the company has many accounting tools to increase its profits: the DTA, inventory adjustments, decrease in the useful life of its PP&E, and business combinations. MU looks promising for investors in the next few months. However, the market is looking to decrease in the next few months so it may be wise to wait.
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