Micron (MU) to Report Q4 Earnings: What's in the Offing?
Micron Technology MU is scheduled to report fourth-quarter fiscal 2023 results on Sep 27.
The company projects a fiscal fourth-quarter adjusted loss of $1.19 (+/- 7 cents) per share. The Zacks Consensus Estimate for the bottom line stands at a loss of $1.19 per share, indicating a drastic decline from the year-ago quarter’s earnings of $1.45 per share.
Meanwhile, Micron estimates revenues of $3.90 billion (+/- $200 million). The consensus mark for revenues is pegged at $3.91 billion, suggesting a 41.1% decrease from the year-earlier period’s revenues of $6.64 billion.
The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being -69.1%.
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
Substantial customer inventory adjustments across end markets are expected to have hurt the overall financial performance in the fourth quarter. MU’s customers across multiple end markets have been adjusting their DRAM and NAND memory chip purchases amid soft macroeconomic conditions.
Micron’s overall fourth-quarter performance is likely to have been negatively impacted by soft consumer spending due to 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.
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, Netflix NFLX, Equifax EFX and Alphabet GOOGL have the right combination of elements to post an earnings beat in their upcoming releases.
Netflix is slated to report third-quarter 2023 results on Oct 18. The company has a Zacks Rank #3 and an Earnings ESP of +2.69% at present. Netflix’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being -2.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for NFLX’s third-quarter earnings is pegged at $3.49 per share, suggesting growth of 12.6% from the year-ago quarter’s earnings of $3.10. Netflix’s quarterly revenues are estimated to increase 7.6% year over year to $8.53 billion.
Equifax carries a Zacks Rank #3 and has an Earnings ESP of +0.28%. The company is anticipated to report third-quarter 2023 results on Oct 18. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 3.7%.
The Zacks Consensus Estimate for Equifax’s third-quarter earnings stands at $1.78 per share, implying a year-over-year increase of 2.9%. It is estimated to report revenues of $1.33 billion, which suggests an increase of approximately 6.9% from the year-ago quarter.
Alphabet carries a Zacks Rank #3 and has an Earnings ESP of +1.04%. The company is expected to report third-quarter 2023 results on Oct 24. Its earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being -0.9%.
The Zacks Consensus Estimate for GOOGL’s third-quarter earnings is pegged at $1.45 per share, indicating a year-over-year increase of 36.8%. The consensus mark for revenues stands at $63.2 billion, calling for a year-over-year rise of 10.3%.
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Netflix, Inc. (NFLX) : Free Stock Analysis Report
Micron Technology, Inc. (MU) : Free Stock Analysis Report
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