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Weak Memory Chip Demand to Hurt Micron's (MU) Q1 Earnings
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Micron Technology (MU - Free Report) is scheduled to report its first-quarter fiscal 2023 results after market close on Dec 21.
The Boise, Idaho-based semiconductor company’s first-quarter results are likely to have witnessed the negative impacts of the weak demand for its memory chip across multiple end markets. Micron posted top and bottom-line growth of at least double-digit percentage ranges in several quarters due to heightened demand amid the pandemic-led work-and-learn-from-home wave.
However, the trend broke in the fourth quarter of fiscal 2022, with its top and bottom lines plunging approximately 20% and 40%, respectively, on a year-over-year basis. The company blamed rapidly weakening consumer demand and substantial customer inventory adjustments across end markets as the main reason behind the dismal quarterly performance.
The trend is likely to have continued in the first quarter of fiscal 2023 as well. This is expected to have resulted in a drastic decline in revenues and earnings.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $4.08 billion, suggesting a 46.9% decrease from the year-earlier period’s revenues of $7.69 billion. The consensus mark for the bottom line stands at a loss of 2 cents per share, indicating a drastic decline from the year-ago quarter’s earnings of $2.16 per share.
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 weakened the 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. MU’s industrial end market customers are adjusting their DRAM and NAND memory chip purchases amid soft macroeconomic conditions.
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 end market 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.
The Zacks Consensus Estimate for the Computing and Networking business unit’s revenues is pegged at $1.79 billion, indicating a year-over-year decline of 47.4%. The Embedded Solutions Group division’s revenues are anticipated to have declined 37.7% to $760 million.
The consensus mark for Micron’s Mobile Business Unit is pegged at $938 million, indicating a year-over-year decline of 50.8%. The Storage Business Unit’s revenues are forecast to plunge 45.2% to $630 million.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #4 (Sell). Shares of MU have decreased 44.1% year to date (YTD).
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved up 9.4% to $1.86 per share in the past 60 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have decreased 0.9% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 3 cents upward to 29 cents per share over the past 30 days. For fiscal 2023, earnings estimates have moved up by 5 cents to $1.23 per share in the past 30 days.
ZS’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 27.3%. Shares of the company have declined 64.5% YTD.
The Zacks Consensus Estimate for Blackbaud's fourth-quarter 2022 earnings has been revised southward by 3 cents to 58 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 4 cents to $2.59 per share in the past 60 days.
Blackbaud's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 4.9%. Shares of BLKB have slumped 26.8% YTD.
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Weak Memory Chip Demand to Hurt Micron's (MU) Q1 Earnings
Micron Technology (MU - Free Report) is scheduled to report its first-quarter fiscal 2023 results after market close on Dec 21.
The Boise, Idaho-based semiconductor company’s first-quarter results are likely to have witnessed the negative impacts of the weak demand for its memory chip across multiple end markets. Micron posted top and bottom-line growth of at least double-digit percentage ranges in several quarters due to heightened demand amid the pandemic-led work-and-learn-from-home wave.
However, the trend broke in the fourth quarter of fiscal 2022, with its top and bottom lines plunging approximately 20% and 40%, respectively, on a year-over-year basis. The company blamed rapidly weakening consumer demand and substantial customer inventory adjustments across end markets as the main reason behind the dismal quarterly performance.
The trend is likely to have continued in the first quarter of fiscal 2023 as well. This is expected to have resulted in a drastic decline in revenues and earnings.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $4.08 billion, suggesting a 46.9% decrease from the year-earlier period’s revenues of $7.69 billion. The consensus mark for the bottom line stands at a loss of 2 cents per share, indicating a drastic decline from the year-ago quarter’s earnings of $2.16 per share.
Micron Technology, Inc. Price and EPS Surprise
Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. Quote
Soft Consumer Spending to Hurt Q1 Results
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 weakened the 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. MU’s industrial end market customers are adjusting their DRAM and NAND memory chip purchases amid soft macroeconomic conditions.
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 end market 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.
The Zacks Consensus Estimate for the Computing and Networking business unit’s revenues is pegged at $1.79 billion, indicating a year-over-year decline of 47.4%. The Embedded Solutions Group division’s revenues are anticipated to have declined 37.7% to $760 million.
The consensus mark for Micron’s Mobile Business Unit is pegged at $938 million, indicating a year-over-year decline of 50.8%. The Storage Business Unit’s revenues are forecast to plunge 45.2% to $630 million.
Zacks Rank & Stocks to Consider
Currently, Micron carries a Zacks Rank #4 (Sell). Shares of MU have decreased 44.1% year to date (YTD).
Some better-ranked stocks from the broader technology sector are Celestica (CLS - Free Report) , Zscaler (ZS - Free Report) and Blackbaud (BLKB - Free Report) . Celestica sports a Zacks Rank #1 (Strong Buy) at present, while Zscaler and Blackbaud each carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved up 9.4% to $1.86 per share in the past 60 days.
CLS' earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 11.8%. Shares of the company have decreased 0.9% YTD.
The Zacks Consensus Estimate for Zscaler's second-quarter fiscal 2023 earnings has been revised 3 cents upward to 29 cents per share over the past 30 days. For fiscal 2023, earnings estimates have moved up by 5 cents to $1.23 per share in the past 30 days.
ZS’ earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 27.3%. Shares of the company have declined 64.5% YTD.
The Zacks Consensus Estimate for Blackbaud's fourth-quarter 2022 earnings has been revised southward by 3 cents to 58 cents per share over the past 60 days. For 2022, earnings estimates have moved upward by 4 cents to $2.59 per share in the past 60 days.
Blackbaud's earnings beat the Zacks Consensus Estimate thrice in the preceding four quarters while missing the same on one occasion, the average surprise being 4.9%. Shares of BLKB have slumped 26.8% YTD.
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