Chipmaker Micron (NYSEARCA:MJ) reviews fiscal This fall outcomes after the bell on Tuesday. Consensus estimates anticipate $5.9B in income and $0.98 EPS.

Final quarter, Micron guided the highest and backside traces at $5.75-6.25B and $0.95-1.15, respectively. The corporate added on estimated gross margin of 34-37% and $625-675M in working bills.

Concentrate on DRAM/NAND: Pricing weak point drove Micron’s gross sales down for 5 straight quarters earlier than the restoration began final quarter.

In FQ3, DRAM income was up 16% sequentially and 6% Y/Y with ASPs up within the mid-single-digit p.c vary on the quarter. NAND gross sales had been up 10% Q/Q and over 50% Y/Y with ASPs up within the low single-digit vary. DRAM was 66% of Micron’s total income and NAND made up 31%.

Watch FQ1 steering: Throughout a Q&A with KeyBanc final month, Micron CFO Dave Zisner stated FQ4 outcomes can be extra “again finish loaded” than normal and warned the corporate will doubtless miss its FQ1 income steering of $5.4-5.6B.

Zisner cited buyer provide uncertainties, provide imbalances with some finish markets recovering sooner than anticipated and others lagging, and the next quantity of product {qualifications} occurring towards quarter’s finish.

Micron stated cloud server demand remained wholesome however H2 gross sales will doubtless be under the pandemic-driven H1 increase. Enterprise server demand was seen as “clearly weak.”

Latest analyst coloration: Cleveland Analysis upgraded Micron, anticipating the corporate to return to upside efficiency in H2 subsequent fiscal yr with stronger footing into FY22 because the supply/demand improves. In Goldman’s improve, the agency stated the DRAM/NAND pricing weak point was already priced into shares.

Citi anticipated the DRAM weak point to proceed for 2 to a few extra quarters. KeyBanc warned the U.S. actions towards Huawei (7-9% of MU income) could ding sales in Q1-Q2 however stays a bull, advising traders to select up shares throughout any “opportunistic pullbacks.”

Peer movers: Shares of Western Digital (NASDAQ:WDC), which holds a bigger share of the worldwide DRAM market than Micron, often strikes with MU information. The provision chain is much less more likely to transfer, however American Superconductor (NASDAQ:AMSC) will get 25% of its income from Micron and strikes in sympathy a few quarter of the time, in keeping with Bloomberg knowledge.

Micron shares have gained 9% previously month and are up 1% within the quarter however are down about 9% YTD. Here is how the six month efficiency has stacked up subsequent to WDC, the tech sector (NYSEARCA:XLK), and the S&P 500:


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