MU inventory: Micron gives unstable outlook

Micron Technology (MU) shares fell Friday after the memory chip maker significantly missed estimates with its guidance for the current quarter. MU stock led other semiconductor stocks down in the report.


Boise, the Idaho-based company late Thursday said it earned $2.59 a share adjusted on sales of $8.64 billion for the third fiscal quarter ended May 2. 6. Analysts polled by FactSet expect Micron to earn $2.43 a share on revenue of $8.64 billion. On a year-over-year basis, Micron’s earnings grew 38% while sales grew 16%.

For the current quarter, Micron forecasts adjusted earnings of $1.63 a share on revenue of $7.2 billion. Still, analysts were expecting earnings of $2.60 a share on sales of $9.15 billion in Micron’s fiscal fourth quarter. For the first quarter of the year, Micron earned $2.42 a share on revenue of $8.27 billion.

“Recently, the demand environment in the industry has weakened and we are taking action to correct our supply growth in fiscal year 2023,” Chief Executive Officer Sanjay Mehrotra said in a statement. New information posted. “We are confident of the world’s long-term demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.”

MU stock has a sub composite rating

Micron blamed its disappointing outlook on weak smartphone and PC sales as well as supply and demand problems in China. The company also cited elevated inventory levels among customers using its cloud computing services.

Above stock market today, MU shares fell 3% to close at 53.65. In normal Thursday trading, MU shares fell 1.3% to 55.28.

The Philadelphia Semiconductor Index, known as the SOX, fell 3.8% on Friday. SOX contains the 30 largest semiconductor stocks traded in the US As of now, SOX is down 37.7%.

MU stock ranks 5th out of 10 stocks in IBD’s Computer-Data Storage industry group, according to Check out the IBD kho repository. It has a subpar IBD Composite Rating 46 out of 99.

The IBD Composite Rating is a combination of key technical and fundamental indicators to help investors gauge a stock’s strength. The best growth stocks have a Composite Rating of 90 or higher.

Analysts slash price target on MU stock

At least 15 Wall Street analysts cut their MU stock price target following the company’s earnings report. Of those analysts, 12 have a buy rating on Micron, two are neutral, and one has a sell rating.

In recent weeks, Wall Street analysts have been heating up their expectations for semiconductor companies ahead second quarter earnings season.

“Memory is often the first shoe down in a (semiconductor) down cycle,” said Robert Maire, president of consulting firm Semiconductor Advisors. “Earnings season could actually turn out to be very bad as more shoes could fall in the tech and chip sectors.”

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


Chip design firms get upgraded when chip makers downgrade

Qualcomm shares rise as Apple’s 5G modem chip ‘fails’, analyst says

Chip Roils Chatter Market on PC, Computer Manufacturer

Best Growth Stocks to Buy and Watch: See updates for IBD stock list

Find winning stocks with MarketSmith Pattern Recognition & Custom Monitor

Leave a Comment