Micron (MU) to Report Third Quarter Results: What’s Next?

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Micronic technology MU is expected to release its results for the third quarter of fiscal 2021 on June 30.

The company expects adjusted third quarter earnings to be $ 1.62 (+/- 7 cents) per share. Zacks’ consensus estimate for quarterly earnings is set at $ 1.67 per share, after being revised up 4 cents in the past 30 days. The consensus mark indicates an increase of 103.7% from the quarter of last year.

Meanwhile, Micron estimates revenue at $ 7.1 billion (+/- $ 200 million). The consensus revenue mark is currently pegged at $ 7.16 billion, which suggests a 31.8% increase from the previous year period.

Company profits have beaten Zacks’ consensus estimate over the past four quarters, with the average surprise being 6.5%.

Micron Technology, Inc. Price and consensus

Micron Technology, Inc. Price and consensus

Micron Technology, Inc. price-consensus-chart | Quote from Micron Technology, Inc.

Let’s see how things turned out before this announcement.

Factors to consider

Micron’s business has weathered the crippling economic impact of the coronavirus pandemic. The stay-at-home situation spurred significant demand for chips from PC makers and data center operators, which is expected to drive Micron’s profits in the fiscal third quarter.

The global quarantine situation has fueled a significant demand for PCs and laptops, with the increase in the number of workers and students working and learning from home.

The need to work and learn from home has also fueled the demand for cloud storage. In addition, lockdowns have increased the use of online and e-commerce services globally, forcing data center operators to upgrade their capacities to meet the rising demand for cloud services. All of these factors likely helped Micron’s sales in the quarter under review.

A sharp increase in DRAM bit shipments for the cloud, graphics, PC & laptop, 5G and automotive markets is expected to have been positive in the reportable quarter.

Still, a higher mix of low margin NAND, coupled with low memory prices and minimal drop in manufacturing costs, is likely to have squeezed margins.

Additionally, Micron’s heavy reliance on China is a hindrance due to the ongoing trade dispute between the United States and China. Restrictions on exports to Huawei are expected to have hurt the memory chipmaker’s revenue growth.

Additionally, higher prequalification and labor costs likely negatively impacted Micron’s bottom line in the third quarter. During the second quarter of fiscal year conference call, the company indicated that it continues to forecast increased operating expenses in the second half of fiscal 2021 due to higher prequalification fees and labor.

Notably, on his fiscal first quarter conference call as well, Micron said he expected a surge in operating expenses in the second half of fiscal 2021. quarter should trigger that spending hike.

During the earnings conference call, Micron also said it intends to incur additional prequalification-related expenses in the second half of the fiscal year, which will further inflate expenses for the financial year. ‘exploitation. As a result, Micron expects operating expenses to increase by approximately 10% in the third fiscal quarter.

What our model says

Our proven model predicts increased profits for Micron this season. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy) or 3 (hold) rank increases the odds of beating the winnings. You can discover the best stocks to buy or sell, before they are flagged, with our ESP Earnings Filter.

Micron currently has a Zacks rank of 2 and has a revenue ESP of + 6.83%.

Actions with favorable combinations

Here are a few companies that according to our model have the right mix of elements to post profit beats in their next releases:

Bed Bath & Beyond Inc. BBBY has an Income ESP of + 52.38% and currently carries a Zacks Rank of 2. You can see The full list of today’s Zacks # 1 Rank stocks here.

JPMorgan Chase & Co. JPM has a revenue ESP of + 4.89% and currently holds a Zacks rank of 3.

Wells Fargo & Company WFC has an ESP on earnings of + 1.17% and is currently ranked 3rd among Zacks.

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