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Tale of the Tape

Zacks Equity Research

Can Micron (MU) Keep the Earnings Streak Alive This Quarter?
July 30, 2014


Trades from $3
Looking for a stock that might be in a good position to beat earnings at its next report? Consider Micron Technology Inc. (MU - Free Report) , a firm in the Semiconductor- Memory Chips industry, which could be a great candidate for another beat.

This company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. In fact, in these reports, MU has beaten estimates by at least 40% in both cases, suggesting it has a nice short-term history of crushing expectations.

Earnings in Focus

Two quarters ago, MU expected to earn 61 cents per share, while it actually produced earnings of 85 cents per share, a beat of 39.3%. Meanwhile, for the most recent quarter, the company looked to deliver earnings of 71 cents per share, when it actually saw earnings of 79 cents per share instead, representing an 11.3% positive surprise.

Thanks in part to this history, recent estimates have been moving higher for Micron. In fact, the  Earnings ESP for MU is positive, which is a great sign of a coming beat.

After all, the Zacks Earnings ESP compares the most accurate estimate to the broad consensus, looking to find stocks that have seen big revisions as of late, suggesting that analysts have recently become more bullish on the company’s earnings prospects. This is the case for MU, as the firm currently has a Zacks Earnings ESP of 27.16%, so another beat could be around the corner.

This is particularly true when you consider that MU has a great Zacks Rank #2 (Buy), which can be a harbinger of outperformance and a signal for a strong earnings profile. And when you add this solid Zacks Rank to a positive Earnings ESP, a positive earnings surprise happens nearly 70% of the time, so it seems pretty likely that MU could see another beat at its next report, especially if recent trends are any guide.

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