Micron (MU) to Report Q3 Earnings: What's in the Offing?
Micron Technology MU is scheduled to report third-quarter fiscal 2023 results on Jun 28.
The company projects a fiscal third-quarter adjusted loss of $1.58 (+/- 7 cents) per share. The Zacks Consensus Estimate for the bottom line stands at a loss of $1.57 per share, indicating a drastic decline from the year-ago quarter’s earnings of $2.59 per share.
Meanwhile, Micron estimates revenues of $3.70 billion (+/- $200 million). The consensus mark for revenues is pegged at $3.69 billion, suggesting a 57.3% decrease from the year-earlier period’s revenues of $8.64 billion.
The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being -69.9%.
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 third-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 third quarter. MU’s customers across multiple end markets have been 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. In May 2023, the Chinese government imposed restrictions on Micron for selling its products in key domestic industries on national security concerns, stating that the memory chipmaker failed to pass a cybersecurity review initiated in late March 2023. Chip sales in China make up approximately 11% of Micron’s total revenues.
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 0.00%. 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, Tyler Technologies TYL, Apple AAPL and Five9 FIVN have the right combination of elements to post an earnings beat in their upcoming releases.
Tyler is expected to report second-quarter 2023 results on Jul 26. The company has a Zacks Rank #3 and an Earnings ESP of +0.54% at present. Tyler’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 2.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for TYL’s second-quarter earnings is pegged at $1.86 per share, suggesting a decline of 1.1% from the year-ago quarter’s earnings of $1.88. Tyler’s quarterly revenues are estimated to increase 4.7% year over year to $490.7 million.
Apple carries a Zacks Rank #3 and has an Earnings ESP of +3.39%. The company is anticipated to report third-quarter fiscal 2023 results on Jul 27. Its earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 2.7%.
The Zacks Consensus Estimate for Apple’s third-quarter earnings stands at $1.18 per share, implying a year-over-year decrease of 1.7%. It is estimated to report revenues of $81.2 billion, which suggests a decline of approximately 2.2% from the year-ago quarter.
Five9 carries a Zacks Rank #3 and has an Earnings ESP of +5.13%. The company is expected to report second-quarter 2023 results on Jul 27. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 49.9%.
The Zacks Consensus Estimate for FIVN’s second-quarter earnings is pegged at 39 cents per share, indicating a year-over-year increase of 14.7%. The consensus mark for revenues stands at $214.1 million, suggesting a year-over-year rise of 13.1%.
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