Micron Technology Inc. (NASDAQ:MU)

The financial data reveals notable fluctuations in several key performance indicators over the observed periods. The net operating profit after taxes (NOPAT) exhibits a general increasing trend in the first three years, rising from 2,891 million to 9,071 million US dollars, indicating improved operational profitability. However, this is followed by a significant decline into negative territory in the fourth period, with a value of -5,885 million US dollars, before recovering again in the subsequent years to 857 million and then sharply increasing to 8,713 million US dollars by the last period.

The cost of capital shows a relatively stable pattern with slight variations, fluctuating between 16.01% and 17.14%. This suggests that the company's risk profile and the cost to finance its investments remained somewhat consistent, with a minor increase toward the final year.

Invested capital consistently increased over the entire timeframe, starting at 42,291 million US dollars and growing to 61,173 million US dollars by the end. This steady growth implies ongoing investment in assets or operations, which may support future earnings growth despite the volatility observed in profits.

The economic profit, which factors in the cost of capital relative to the invested capital and operating profit, reflects a volatile situation. Initially, economic profit is negative at -3,954 million US dollars and improves over the next years, reaching a positive peak of 398 million US dollars. However, it sharply deteriorates again in the fourth period to -14,444 million US dollars and remains negative afterward, though showing some recovery in the final period. This pattern indicates that the company struggled to generate returns above its capital costs in several periods, particularly during the marked downturn, but has shown some ability to improve this metric toward the end.

Net Operating Profit After Taxes (NOPAT)

Generally increasing for three years, then a significant loss, followed by recovery and strong growth.

Cost of Capital

Relatively stable with slight fluctuations, ending slightly higher than earlier periods.

Invested Capital

Consistent growth across all periods, signaling increased asset base or investments.

Economic Profit

High volatility with negative results dominating, punctuated by brief positive performance, indicating challenges in generating returns exceeding capital costs.

Net Income (Loss) Attributable to Micron

The net income exhibited significant fluctuations over the observed periods. Starting from a positive value of 2,687 million USD in 2020, there was a substantial increase to 5,861 million USD in 2021, followed by a further rise to 8,687 million USD in 2022. However, the year 2023 saw a marked reversal with a net loss of 5,833 million USD. Subsequently, the net income rebounded in 2024 to a positive 778 million USD and further increased to 8,539 million USD in 2025. This pattern highlights considerable volatility in profitability, with a notable dip in 2023 amidst an overall upward trajectory in net income.

Net Operating Profit After Taxes (NOPAT)

NOPAT reflected a trend similar to net income, indicating a strong correlation between operating profitability and net earnings. The figure rose steadily from 2,891 million USD in 2020 to 5,967 million USD in 2021 and reached a peak of 9,071 million USD in 2022. A sharp decline occurred in 2023, with NOPAT turning negative at -5,885 million USD. Recovery ensued in 2024 with a modest positive value of 857 million USD and a significant improvement to 8,713 million USD in 2025. This indicates that operating efficiency and after-tax operating profits experienced a disruption in 2023 but resumed a positive and robust recovery in the subsequent years.

Overall Trends and Insights

Both net income and NOPAT demonstrated robust growth through 2022, followed by a critical downturn in 2023. The sharp declines in 2023 suggest an extraordinary or challenging event impacting profitability and operational effectiveness during that year. The recovery in 2024 and strong performance in 2025 reflect resilience and an effective restoration of earnings capacity. The data suggests that despite volatility, the company managed to return to a growth trajectory in profitability in the most recent period.

Income Tax Provision

Over the examined periods, the income tax provision exhibits considerable volatility. Starting at 280 million USD in 2020, it rose significantly to 394 million USD in 2021. The figure then more than doubled to 888 million USD in 2022, indicating a substantial increase in tax expenses or taxable income during that year. However, in 2023, the income tax provision sharply declined to 177 million USD, the lowest in the observed timeframe. It then rebounded to 451 million USD in 2024 and reached a peak of 1,124 million USD in 2025, marking the highest level recorded. This pattern suggests fluctuations in profitability or changes in tax strategy, with a notable upward trend towards the latter periods.

Cash Operating Taxes

Cash operating taxes demonstrate a parallel yet slightly less volatile pattern compared to the income tax provision. Beginning at 189 million USD in 2020, the amount increased to 446 million USD in 2021 and further rose to 618 million USD in 2022. A significant decline occurred in 2023, where the cash operating taxes dropped to 172 million USD, closely mirroring the income tax provision trend. Following this low point, there was a recovery to 428 million USD in 2024, and a substantial increase to 963 million USD in 2025. The overall trajectory shows growth in cash taxes paid, with a notable dip in 2023, suggesting changes in operating income or tax payments timing.

Comparative Analysis

Both income tax provision and cash operating taxes reveal correlated fluctuations across the years, with peaks in 2022 and 2025 and a pronounced trough in 2023. The income tax provision consistently exceeds cash operating taxes, indicating differences likely due to deferred tax adjustments or non-cash tax expenses. The sharp variations imply that fiscal results and tax obligations experienced significant shifts over the period, possibly impacted by changes in earnings, tax legislation, or accounting practices.

Total Reported Debt & Leases

The total reported debt and leases demonstrate a fluctuating upward trend over the analyzed periods. Initially, the amount increased slightly from 7,230 million USD in 2020 to 7,576 million USD in 2022. A significant rise occurred between 2022 and 2023, with the value nearly doubling to 13,999 million USD. This elevated level of debt and leases was sustained through 2024 and increased further to 15,352 million USD in 2025, indicating an increasing reliance on debt financing in recent years.

Shareholders’ Equity

Shareholders’ equity generally exhibited growth over the reported timeframe, rising from 38,996 million USD in 2020 to a peak of 49,907 million USD in 2022. However, in 2023, equity declined to 44,120 million USD before resuming an upward trend, reaching 54,165 million USD in 2025. This pattern suggests some volatility, but a longer-term positive increase in equity base is evident by the end of the period.

Invested Capital

Invested capital shows an overall growth trend, moving from 42,291 million USD in 2020 to 61,173 million USD in 2025. The increase appears steady, with minor fluctuations around 2023 and 2024 when the invested capital plateaued near 53,000 million USD before rising again. This reflects a consistent expansion in the company's total capital commitment over the examined years.

General Insights

The data indicates that the company has been increasing its use of debt and leases substantially since 2022, which has contributed to rising invested capital. Despite some fluctuations in shareholders’ equity, the overall capital structure suggests growth and increased financial leverage. The simultaneous growth in both equity and debt levels points to an expansion strategy that involves utilizing both internal funds and external borrowings.

The financial data reveals the company's economic profit, invested capital, and economic spread ratio over a period of six years, showing significant fluctuations and notable trends.

Economic Profit

The economic profit displayed a highly volatile trend. It experienced a substantial loss in the initial year, which improved substantially in the second year, reaching a positive value in the third year. However, the subsequent years saw a sharp decline, with negative economic profits intensifying greatly before slightly improving in the final year. This pattern indicates periods of operational challenges and profitability fluctuations over the analyzed timeframe.

Invested Capital

Invested capital showed a consistent upward trajectory throughout the years. Starting from a base value of 42,291 million US dollars, it gradually increased each year, reaching 61,173 million US dollars by the end of the period. This steady growth suggests ongoing investments and asset base expansion, reflecting the company's strategy of capital allocation and potential preparation for future growth opportunities.

Economic Spread Ratio

The economic spread ratio followed a similar volatile pattern to economic profit, reflecting the returns relative to the cost of capital. Starting from a negative ratio, it improved towards positive territory in the third year, indicating a period of value creation. However, it sharply declined again in the following years, reaching increasingly negative levels before partially recovering at the end of the period. This fluctuation indicates challenges in maintaining returns above the cost of capital consistently.

Overall, the data highlights a company undergoing significant challenges in sustaining economic profitability, despite steadily increasing its invested capital. The fluctuations in economic spread ratio underscore periods of both value creation and destruction, emphasizing the need for strategic focus on improving operational efficiency and capital utilization.

Revenue Trends

The revenue demonstrated a generally positive trajectory over the reported periods, starting at $21,435 million and increasing to $37,378 million by the final period. There was a notable dip in the fourth period to $15,540 million, followed by recovery and growth in subsequent years. This indicates some volatility but an overall upward trend in sales.

Economic Profit Trends

Economic profit showed significant fluctuation, beginning with a substantial loss of -$3,954 million, improving to a near break-even and slight positive margin at $398 million in the third period. However, from the fourth period onward, economic profit sharply declined again, reaching a low of -$14,444 million, followed by partial recoveries, but remaining negative through the last period.

Economic Profit Margin Analysis

The economic profit margin mirrored the economic profit pattern, starting at a negative margin of -18.44%, improving to a positive 1.29% in the third period, then rapidly deteriorating to -92.95% in the fourth period. Although partial improvement occurred in subsequent years, margins remained negative, suggesting challenges in generating value relative to revenue in recent years despite revenue growth.

Overall Insights

Despite overall revenue growth with a significant peak in the latest period, the company struggled to maintain positive economic profit and margins, indicating that cost structures or capital costs may have increased disproportionately or operational efficiencies were impacted. The large negative economic profit margin in the fourth period highlights a period of significant financial stress. Recent partial recoveries suggest some corrective measures but economic profitability remains a critical concern.