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Micron (MU) to Report Q4 Earnings: What's in the Cards?
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Micron Technology (MU - Free Report) is set to report fourth-quarter fiscal 2020 results on Sep 29.
For the quarter, the company expects earnings of $1.05 per share (+/- 10 cents). The Zacks Consensus Estimate for earnings stands at $1 per share, unchanged over the past 30 days and indicating 78.6% growth from the figure reported in the year-ago quarter.
Meanwhile, Micron expects revenues to be in the $5.75-$6.25 billion range. The consensus mark for revenues is currently pegged at $5.91 billion, suggesting an increase of 21.4% from the year-ago quarter’s reported figure.
The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.1%.
Let’s see how things are shaping up for this announcement.
Factors to Watch Out For
Micron’s fourth-quarter results are expected to reflect bleak memory-chip demand as customers have been adjusting inventories in response to the economic recession caused by the coronavirus outbreak.
Further, overall macro-economic uncertainty in the semiconductor space is expected to have cast a pall over Micron’s top-line growth prospects in the to-be-reported quarter.
The coronavirus outbreak dealt a heavy blow on the cyclical recovery in DRAM and NAND, as acknowledged by Micron in its fiscal third-quarter conference call. Segments like automotive and smartphones have suffered significantly, which doesn’t bode well for the company. Notably, supply-chain disruption has significantly hurt the automotive sector.
Additionally, Micron’s heavy dependence on China is a headwind due to the ongoing tit-for-tat trade war between the United States and China. Restrictions on export to Huawei are expected to have hurt top-line growth of this Zacks Rank #5 (Strong Sell) company.
Moreover, higher mix of lower-margin NAND, coupled with low memory prices and minimal decline in manufacturing cost, is likely to have strained margins.
Micron is expected to have benefited from strong demand for cloud storage. Coronavirus-led lockdowns have enhanced the usage of online services globally. Therefore, data-center operators have been boosting their cloud-storage capacities to accommodate the growing demand for cloud services, thereby aiding Micron.
Notably, Micron has started sampling its higher-frequency DDR4 modules for Intel’s (INTC - Free Report) Ice Lake server platform.
Further, strong demand for PCs driven by work-from-home and online-learning wave has been beneficial for Micron. Per IDC data, second quarter (April-June) PC shipments grew 11.2% to 72.3 million. HP (HPQ - Free Report) was the top vendor, trailed by Lenovo, per IDC.
Markedly, in fiscal third-quarter, Micron’s DRAM bit shipments expanded significantly on a sequential basis, driven by rapid work-from-home infrastructure deployment, as well as increased 5G deployment, particularly in Asia. The momentum is expected to have continued in the to-be-reported quarter.
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Micron (MU) to Report Q4 Earnings: What's in the Cards?
Micron Technology (MU - Free Report) is set to report fourth-quarter fiscal 2020 results on Sep 29.
For the quarter, the company expects earnings of $1.05 per share (+/- 10 cents). The Zacks Consensus Estimate for earnings stands at $1 per share, unchanged over the past 30 days and indicating 78.6% growth from the figure reported in the year-ago quarter.
Meanwhile, Micron expects revenues to be in the $5.75-$6.25 billion range. The consensus mark for revenues is currently pegged at $5.91 billion, suggesting an increase of 21.4% from the year-ago quarter’s reported figure.
The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 10.1%.
Micron Technology, Inc. Price and EPS Surprise
Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. Quote
Let’s see how things are shaping up for this announcement.
Factors to Watch Out For
Micron’s fourth-quarter results are expected to reflect bleak memory-chip demand as customers have been adjusting inventories in response to the economic recession caused by the coronavirus outbreak.
Further, overall macro-economic uncertainty in the semiconductor space is expected to have cast a pall over Micron’s top-line growth prospects in the to-be-reported quarter.
The coronavirus outbreak dealt a heavy blow on the cyclical recovery in DRAM and NAND, as acknowledged by Micron in its fiscal third-quarter conference call. Segments like automotive and smartphones have suffered significantly, which doesn’t bode well for the company. Notably, supply-chain disruption has significantly hurt the automotive sector.
Additionally, Micron’s heavy dependence on China is a headwind due to the ongoing tit-for-tat trade war between the United States and China. Restrictions on export to Huawei are expected to have hurt top-line growth of this Zacks Rank #5 (Strong Sell) company.
Moreover, higher mix of lower-margin NAND, coupled with low memory prices and minimal decline in manufacturing cost, is likely to have strained margins.
However, per IDC data second-quarter 2020 (April-June) server sales were strong, which is expected to have benefited Micron. Notably, Hewlett Packard Enterprises (HPE - Free Report) and Dell were ranked as the top vendors by IDC.
Micron is expected to have benefited from strong demand for cloud storage. Coronavirus-led lockdowns have enhanced the usage of online services globally. Therefore, data-center operators have been boosting their cloud-storage capacities to accommodate the growing demand for cloud services, thereby aiding Micron.
Notably, Micron has started sampling its higher-frequency DDR4 modules for Intel’s (INTC - Free Report) Ice Lake server platform.
Further, strong demand for PCs driven by work-from-home and online-learning wave has been beneficial for Micron. Per IDC data, second quarter (April-June) PC shipments grew 11.2% to 72.3 million. HP (HPQ - Free Report) was the top vendor, trailed by Lenovo, per IDC.
Markedly, in fiscal third-quarter, Micron’s DRAM bit shipments expanded significantly on a sequential basis, driven by rapid work-from-home infrastructure deployment, as well as increased 5G deployment, particularly in Asia. The momentum is expected to have continued in the to-be-reported quarter.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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