Micron Technology
MU
is scheduled to report first-quarter fiscal 2023 results on Dec 21.
The company projects fiscal first-quarter adjusted earnings of 4 cents (+/- 10 cents) per share. The Zacks Consensus Estimate for the bottom line stands at a loss of 2 cents per share and has been revised downward by a couple of cents in the past seven days. The consensus mark indicates a drastic decline from the year-ago quarter’s earnings of $2.16 per share.
Meanwhile, Micron estimates revenues of $4.25 billion (+/- $250 million). The consensus mark for revenues is pegged at $4.08 billion, suggesting a 46.9% decrease from the year-earlier period’s revenues of $7.69 billion.
The company’s earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.6%.
Let’s see how things have shaped up before this announcement.
Micron Technology, Inc. Price and EPS Surprise
Micron Technology, Inc. price-eps-surprise
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Micron Technology, Inc. Quote
Factors at Play
Micron’s overall first-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 first 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 automotive and industrial end markets are expected to have hurt Micron’s top and bottom lines in the first quarter. The company expects a slowdown in its automotive end market demand as customers are rebalancing DRAM and NAND inventory levels to deal with non-memory semiconductor shortages and production challenges.
Moreover, 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 #4 (Sell) and has an Earnings ESP of -350.00%. 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,
Taiwan Semiconductor
TSM
,
Wells Fargo & Company
WFC
and
Delta Air Lines
DAL
have the right combination of elements to post an earnings beat in their upcoming releases.
Taiwan Semiconductor is expected to report fourth-quarter 2022 results on Jan 12, 2023. The company carries a Zacks Rank #2 and has an Earnings ESP of +1.69% at present. Taiwan Semiconductor’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.7%. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.78 per share, suggesting an improvement of 54.8% from the year-ago quarter’s earnings of $1.15. TSM’s quarterly revenues are estimated to increase 29% year over year to $20.29 billion.
Wells Fargo carries a Zacks Rank #2 and has an Earnings ESP of +7.94%. The company is slated to report fourth-quarter 2022 results on Jan 13. Wells Fargo’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 12.7%.
The Zacks Consensus Estimate for WFC’s fourth-quarter earnings is pegged at $1.26 per share, indicating a year-over-year decline of 8.7%. The consensus mark for revenues stands at $19.89 billion, suggesting a year-over-year decrease of 4.6%.
Delta carries a Zacks Rank #3 and has an Earnings ESP of +9.65%. The company is anticipated to report its fourth-quarter 2022 results on Jan 12. Delta’s earnings beat the Zacks Consensus Estimate twice in the preceding four quarters while missing the same on two occasions, the average surprise being 7.9%.
The Zacks Consensus Estimate for Delta’s fourth-quarter earnings stands at $1.20 per share, implying a robust improvement from the year-ago quarter’s earnings of 22 cents. DAL is estimated to report revenues of $12.76 billion, which suggests growth of 34.7% from the year-ago quarter.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar
.
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