Micron Technology Q1 Earnings Preview: Analyst Expectations and Future Outlook

Micron Technology (MU) is set to announce its first-quarter earnings after the market closes on Wednesday. The company, based in Boise, Idaho, aims to mirror the recent success of Broadcom, whose share price climbed following its quarterly earnings announcement.

Analysts are forecasting that Micron will report first-quarter revenues of approximately $8.72 billion. This figure represents a significant increase from $4.73 billion reported in the same quarter last year, as indicated by data from Benzinga Pro.

Importantly, Micron has outperformed analyst revenue expectations for six consecutive quarters and for seven out of the last ten quarters in total. In terms of earnings per share (EPS), estimates suggest that Micron will post EPS of $1.76, a notable recovery from a loss of $0.95 per share in the prior year's first quarter. The company has also surpassed EPS estimates in three straight quarters and seven of the past ten quarters.

Guidance from Micron indicates expected first-quarter revenues between $8.5 billion and $8.9 billion, along with earnings per share in the range of $1.66 to $1.82.

Analyst Perspectives

According to Wedbush analyst Matt Bryson, Micron's first quarter is likely to meet or even exceed analyst estimates, thanks to favorable pricing and product mixes. However, the second quarter may present more challenges in meeting predictions.

Bryson also noted that any pressures from the second quarter could potentially be mitigated by a better product mix, implying that the risks to current forward estimates for the future might not be significant. He anticipates a robust second half of fiscal 2024, supported by positive developments in memory economics.

Sentiment around the memory sector has been notably negative, creating the possibility for a significant upward move in Micron's stock if its results and guidance align closely with expectations. Improvements in product mix and signs of normalizing memory inventory could further facilitate positive outcomes for Micron.

Bryson expressed a measured optimism about Micron, stating, "We don’t have a strong view on MU into the print, but believe the company is well positioned heading into 2025."

Market Context and Future Considerations

Stifel has reiterated a 'Buy' rating for Micron, setting a price target of $135 ahead of the earnings announcement. Micron's upcoming report is particularly significant, as the semiconductor industry heats up in 2024. While major players like Nvidia have faced declines, Micron has seen its share price positively impacted by government investments aimed at enhancing advanced memory chip production.

The semiconductor sector is under increased scrutiny due to substantial government support, which aims to create jobs in the U.S. and expand the domestic market share to reduce reliance on imports. Investors and analysts will pay close attention to Micron's forthcoming earnings for insights into government backing and expectations for the next administration starting in 2025.

Looking ahead, Micron's projections for the upcoming fiscal year are expected to be a focal point for stakeholders, especially following the first-quarter results. CEO Sanjay Mehrota expressed confidence in the company’s competitive positioning, stating, "We are entering fiscal 2025 with the best competitive positioning in Micron's history. We forecast record revenue in fiscal Q1 and a substantial revenue record with significantly improved profitability in fiscal 2025." Analysts and investors will be hoping to hear similar assurances in Wednesday’s earnings call.

Price Action: As of Tuesday, Micron’s stock has risen 1% to $108.82, having traded within a range of $78.63 to $157.54 over the past year. For 2024, Micron's stock is up 32%, reflecting its positive momentum.

Earnings, Stocks, Analysis