Micron Technology reported impressive earnings for its fiscal fourth quarter of 2025, surprising analysts with stronger-than-expected results. Despite beating expectations, the company’s stock fell 2.8% by mid-afternoon trading on Wednesday.
Analysts had anticipated earnings of $2.86 per share on $11.2 billion in revenue. However, Micron surpassed those expectations, posting adjusted earnings of $3.03 per share for the period ending August 28, with total sales hitting $11.3 billion. The company’s management also projected significant sequential growth in both sales and profits for the upcoming fiscal first quarter of 2026.
Examining the quarterly performance further, Micron’s revenue showed an impressive year-over-year increase of 45%. The gross profit margin improved nearly 10 percentage points, reaching 44.7%, while the operating margin climbed 12 points to 32.3%. Under generally accepted accounting principles (GAAP), Micron reported earnings of $2.83 per share, which, although slightly lower than the adjusted earnings, still marked more than a tripling of earnings from the previous year.
For the entire fiscal year 2025, Micron reported $37.4 billion in revenue, achieving a remarkable 49% sales growth and earnings of $7.59 per share.
Despite these strong financial indicators, investor sentiment appeared lukewarm. A potential reason for the market’s reaction could be attributed to concerns buried in the company’s cash-flow statement. While Micron generated a robust operating cash flow of $17.5 billion in fiscal 2025—more than double the cash flow from the previous year—it allocated nearly all of that cash towards capital expenditures. The company ended the fiscal year with only $1.7 billion in free cash flow, revealing a concerning trend: for every dollar of GAAP profit, the company generated only $0.20 in real cash profit.
These figures may have contributed to hesitance among investors, prompting some to consider divesting from Micron stock despite its strong earnings report.
