Micron Technology MU is scheduled to report second-quarter fiscal 2023 results on Mar 28.
The company projects a fiscal second-quarter adjusted loss of 62 cents (+/- 10 cents) per share. The Zacks Consensus Estimate for the bottom line stands at a loss of 66 cents per share and has been revised downward by 3 cents in the past 30 days. The consensus mark indicates a drastic decline from the year-ago quarter’s earnings of $2.14 per share.
Meanwhile, Micron estimates revenues of $3.80 billion (+/- $200 million). The consensus mark for revenues is pegged at $3.78 billion, suggesting a 51.5% decrease from the year-earlier period’s revenues of $7.79 billion.
The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being -20.1%.
Let’s see how things have shaped up before this announcement.
Micron Technology, Inc. Price and EPS Surprise
Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. Quote
Factors at Play
Micron’s overall second-quarter performance is likely to have been negatively impacted by soft consumer spending due to rising inflationary pressure and growing concerns over the global economic slowdown. Softened consumer spending has resulted in weak memory chip demand from the smartphone and personal computer end markets.
Substantial customer inventory adjustments across end markets are expected to have hurt the overall financial performance in the second quarter. Data center operators are adjusting their memory and storage purchases due to the shortage of other components as well as reducing their inventories amid ongoing macroeconomic uncertainties.
Industry-wide component supply constraints across the industrial end markets are expected to have hurt Micron’s top and bottom lines in the second quarter. MU’s industrial end market customers are adjusting their DRAM and NAND memory chip purchases amid soft macroeconomic conditions.
The memory chip maker’s heavy dependence on China is a headwind due to the ongoing tit-for-tat trade spat between the United States and China. Additionally, a higher mix of lower-margin NAND, coupled with low memory prices and a minimal decline in manufacturing costs, is expected to have strained margins.
What Our Model Says
Our proven model does not conclusively predict an earnings beat for Micron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Micron currently carries a Zacks Rank #3 and has an Earnings ESP of -2.90%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Alphabet GOOGL, NCR Corporation NCR and Corning Incorporated GLW have the right combination of elements to post an earnings beat in their upcoming releases.
Alphabet is expected to report first-quarter 2023 results on Apr 25, 2023. The company carries a Zacks Rank #3 and has an Earnings ESP of +6.28% at present. Alphabet’s earnings missed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being -8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $1.09 per share, suggesting a decline of 11.4% from the year-ago quarter’s earnings of $1.23. GOOGL’s quarterly revenues are estimated to increase 1.7% year over year to $56.95 billion.
NCR carries a Zacks Rank #3 and has an Earnings ESP of +35.80%. The company is anticipated to report first-quarter 2023 results on Apr 25. NCR’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being -8.3%.
The Zacks Consensus Estimate for NCR’s first-quarter earnings is pegged at 41 cents per share, indicating a year-over-year increase of 24.2%. The consensus mark for revenues stands at $1.84 billion, suggesting a year-over-year decrease of 1.3%.
Corning carries a Zacks Rank #3 and has an Earnings ESP of +5.91%. The company is anticipated to report its first-quarter 2023 results on Apr 25. Corning’s earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while meeting the same on one occasion, the average surprise being 4.7%.
The Zacks Consensus Estimate for Corning’s first-quarter earnings stands at 39 cents per share, implying a decline of 27.8% from the year-ago quarter’s earnings of 54 cents. GLW is estimated to report revenues of $3.31 billion, which suggests a decrease of 27.8% from the year-ago quarter.
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