Is Micron (MU) Likely to Beat Estimates This Earnings Season?

Zacks Equity Research

20 June 2024 at 9:37 am·5-min read

Micron Technology, Inc. Price and EPS Surprise

Micron Technology MU is likely to beat expectations when it reports third-quarter fiscal 2024 results after market close on Jun 26.

The company projects fiscal third-quarter adjusted earnings of 45 cents per share (+/- 7 cents). The Zacks Consensus Estimate for the bottom line is pegged at 48 cents per share, which implies a robust improvement from the year-ago quarter’s loss of $1.43.

Meanwhile, Micron estimates revenues of $6.6 billion (+/- $200 million). The consensus mark for revenues is pegged at $6.64 billion, which suggests a 76.9% increase from the year-earlier period’s revenues of $3.75 billion.

The company’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 69.6%.

Let’s see how things have shaped up before this announcement.

Micron Technology, Inc. Price and EPS Surprise

Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. Quote

Factors to Consider

Micron's third-quarter performance is expected to be positively impacted by the strong demand for its memory chips used in graphics processing unit (GPU)-enabled artificial intelligence (AI) servers. Datacenter operators are enhancing their capabilities with generative AI and large language models using GPUs. Since memory is crucial for these GPU-enabled AI servers, this trend is likely to have boosted Micron's revenues in the reported quarter.

Additionally, an improving supply-demand environment is anticipated to have supported Micron's third-quarter performance. For several quarters, substantial customer inventory adjustments across end markets negatively impacted Micron’s financial results. However, the company experienced improved supply-demand conditions in the last two back-to-back quarters, leading to higher prices for DRAM and NAND.

The Zacks Consensus Estimate for DRAM revenues is pegged at $4.7 billion for the third quarter, which indicates a year-over-year increase of 75.9%. The consensus mark for NAND revenues stands at $1.82 billion, which implies a whopping 79.3% surge from the year-ago quarter.

Despite these positive factors, some challenges may have partially offset the gains. Soft consumer spending due to inflationary pressures and concerns about a global economic slowdown is likely to have weakened the demand for memory chips in the smartphone and personal computer markets.

Moreover, Micron's heavy reliance on China is a potential downside due to the ongoing trade tensions between the United States and China. The company's margins might also be strained by a higher mix of lower-margin NAND products and only minimal reductions in manufacturing costs.

Earnings Whispers

Our proven model predicts an earnings beat for Micron this earnings 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, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate (50 cents per share) and the Zacks Consensus Estimate (48 cents), is +4.09%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: MU carries a Zacks Rank #2.

Other Stocks With the Favorable Combination

Per our model, General Mills, Inc. GIS, Nike, Inc. NKE and JPMorgan Chase & Co. JPM also have the right combination of elements to post an earnings beat in their upcoming releases.

General Mills is slated to report fourth-quarter fiscal 2024 results on Jun 26. The company has a Zacks Rank #3 and an Earnings ESP of +0.58% at present. The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 7.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for General Mills’ fourth-quarter earnings is pegged at 99 cents per share, which suggests a decrease of 11.6% from the year-ago quarter’s earnings of $1.12. Its quarterly revenues are estimated to decline 3.1% year over year to $4.87 billion.

Nike carries a Zacks Rank #3 and has an Earnings ESP of +0.11%. The company is scheduled to report fourth-quarter fiscal 2024 results on Jun 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 22.6%.

The Zacks Consensus Estimate for Nike’s fourth-quarter bottom line stands at earnings of 86 cents per share, significantly higher than the year-ago quarter’s earnings of 66 cents. It is estimated to report revenues of $12.91 billion, which suggests an increase of 0.7% from the year-ago quarter.

JPMorgan carries a Zacks Rank #3 and has an Earnings ESP of +1.48%. The company is scheduled to report second-quarter 2024 results on Jul 12. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.3%.

The Zacks Consensus Estimate for JPMorgan’s second-quarter earnings is pegged at $4.17 per share, which indicates a year-over-year decrease of 4.6%. The consensus mark for revenues stands at $43.25 billion, which calls for a year-over-year rise of 4.7%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report

NIKE, Inc. (NKE) : Free Stock Analysis Report

General Mills, Inc. (GIS) : Free Stock Analysis Report

Micron Technology, Inc. (MU) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

Yahoo Finance AU
Dire sign in Aussie dollar spike: 'On the warpath'
Australia is "straying from the narrow path", so could that spell a recession?
Yahoo Finance AU
$1.5 million pay day using simple $10 trick: 'Worth your attention'
Finance expert Ben Nash details how to avoid tax and build your retirement nest egg with these super tricks.
Bloomberg
A $100 Billion Bet on China’s Economy Sours as Warehouses Empty
(Bloomberg) -- In many parts of China, the warehouses and industrial parks that used to be a magnet for international investors are grappling with a surprising slowdown in business activity. Most Read from BloombergYouTuber Dr Disrespect Was Allegedly Kicked Off Twitch for Messaging MinorVW Latches Onto Rivian in $5 Billion EV Pact to Regain MomentumTrump Could Actually Lose Florida. Here’s Why.Nvidia Rout Takes Breather as Traders Scour Charts for SupportJulian Assange Leaves Court ‘Free Man,’
Bloomberg
China’s Finance Elite Face $400,000 Pay Cap, Bonus Clawbacks
(Bloomberg) -- The era of big paychecks for Chinese financiers is fast coming to an end as some of the industry’s biggest companies impose strict new limits to comply with President Xi Jinping’s “common prosperity” campaign.Most Read from BloombergSupreme Court Poised to Allow Emergency Abortions in IdahoBolivia’s President Arce Swears in New Army Chief After Coup BidSpaceX Tender Offer Said to Value Company at Record $210 BillionChina’s Finance Elite Face $400,000 Pay Cap, Bonus ClawbacksYouTub
Yahoo Finance AU
Aussie banks issue cashless warning: ‘Going digital’
Aussies are using less and less cash with the drop recorded across ages, incomes and locations.
South China Morning Post
Hong Kong helps relieve yuan pressures as mainland China grapples with capital outflows
The yuan is facing its highest level of capital outflow in eight years, according to new research, and data suggest a wave of offshore yuan remittances from Hong Kong to mainland China have helped offset some of the currency's looming depreciation pressures. China's trailing 12-month net capital outflows stood at US$139 billion as of May 2024, the worst year for the figure since the period from 2016 to 2017, said the French investment bank Natixis in a presentation on Tuesday. Firms are reluctan
Simply Wall St.
Shareholders Are Optimistic That Paychex (NASDAQ:PAYX) Will Multiply In Value
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...
NewsWire
Dire warning of several rate hikes this year
The worst fears of household borrowers could soon be realised as the Reserve Bank grapples with stubbornly persistent price pressures.
GOBankingRates
I’m a Self-Made Millionaire: Here’s the Biggest Money Mistake I’ve Survived
Reaching significant wealth is the kind of thing we all dream of -- especially when we're able to achieve it on our own. Read Next: I'm a Frugal Self-Made Millionaire: 6 Things I Never Waste Money On...
Insider Monkey
The Biggest Economy in the World by the End of 2024
We recently compiled a list of the 50 Biggest Economies in the World by the End of 2024 and in this article we will look at the country that topped our rankings. A Brief Analysis of the World Economic Outlook According to the United Nations, the global economic outlook has improved since January. The global […]
NewsWire
Aussie shares sink on inflation shock, hike fears
The Australian sharemarket tumbled on Wednesday after a shock inflation print sparked fears of a possible rate hike.
Simply Wall St.
Top ASX Dividend Stocks To Consider In June 2024
Over the past year, the Australian market has shown a healthy uptick, growing by 9.9%, despite remaining flat in the last week. With earnings forecasted to grow by 14% annually, investors might consider dividend stocks that not only offer potential for steady income but also align with these promising market conditions.
Insider Monkey
The Wealthiest Person in Singapore
We recently compiled a list of the 30 Wealthiest People in Singapore and in this article, we will look at the richest person in Singapore. An Outlook of the Singaporean Economy According to the Ministry of Trade and Industry (MTI), the Singaporean economy rose at a more rapid pace than expected in Q1 2024. The GDP […]
Bloomberg
Nvidia Rout Takes Breather as Traders Scour Charts for Support
(Bloomberg) -- Nvidia Corp. shares showed signs of steadying after a $430 billion selloff sent traders searching for signals as to where the bottom may be.Most Read from BloombergYouTuber Dr Disrespect Was Allegedly Kicked Off Twitch for Messaging MinorNvidia Rout Takes Breather as Traders Scour Charts for SupportTrump Could Actually Lose Florida. Here’s Why.Rivian Gets $5 Billion Lifeline in Joint Venture With VolkswagenJulian Assange Leaves Court ‘Free Man,’ Ending 14-Year DramaThe stock rose
Yahoo Finance
A small group of tech stocks is driving the market rally — why that's 'not a flaw'
Wall Street strategists are arguing the stock market rally's next leg higher doesn't need broader participation.
Fortune
The U.S. is about to get slammed by a ‘very active’ hurricane season—but the carnage could be good news for these five insurance stocks, analyst says
“If this grim forecast comes to fruition, it will likely buoy pricing” for insurance, says CFRA Research’s Catherine Seifert.
Simply Wall St.
Ralph Lauren (NYSE:RL) Is Paying Out A Larger Dividend Than Last Year
The board of Ralph Lauren Corporation ( NYSE:RL ) has announced that it will be paying its dividend of $0.825 on the...
Yahoo Finance Video
Dot-com bubble feels 'very similar' to today's environment
With Nvidia up over 154% year to date, Stifel managing director and chief equity strategist Barry Bannister joins Morning Brief to give insight into Nvidia's (NVDA) recent moves and how the tech giant reminds him of Cisco's (CSCO) performance during the dot-com bubble. "What happened with Cisco (CSCO) is, and same thing happened to Microsoft (MSFT), and Amgen (AMGN) and a number of other big cap stocks, is their PE multiple was too high and they earned into it over the course of the next 15 years. So the earnings went up dramatically, as was expected. This happened with the nifty 50 stocks in the early 70s. They earned very well, but their PE multiples were too high ... those companies had these mid-30s, 40-time multiples. They earned into it over the course of a decade," Bannister explains. He outlines the similarities between the dot-com bubble and the AI sector today: "But what we have today is extreme optimism on new technology. Then it was the internet, now it's AI. Narrow markets, increasingly narrow markets with a high valuation. Equity ownership was very high. And the day traders and all that. I'm just saying that you have to have been there 25 years ago to remember that it was a very similar feeling environment today." For more expert insight and the latest market action, click here to watch this full episode of Morning Brief. This post was written by Nicholas Jacobino
Simply Wall St.
Companies Like QuinStreet (NASDAQ:QNST) Can Afford To Invest In Growth
We can readily understand why investors are attracted to unprofitable companies. For example, although Amazon.com made...
Reuters
H&M slumps on doubts over margin target and June sale drop
STOCKHOLM (Reuters) -H&M cast doubt over its full-year profit margin target on Thursday after missing quarterly earnings forecasts and predicting a fall in June sales, sending shares in the world's No.2 listed fashion retailer down as much as 15%. Sales this month are likely to fall 6% in local currencies versus a year earlier, partly due to poor weather in many markets, the Swedish company said. CEO Daniel Erver said H&M still stood by its 10% operating margin goal for 2024, but that it had got harder to reach.

ALL ORDS

AUD/USD

ASX 200

OIL

GOLD

Bitcoin AUD

CMC Crypto 200

Is Micron (MU) Likely to Beat Estimates This Earnings Season?