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Micron Technology (MU) Q4 Earnings to be Hurt by Weak Demand

Micron Technology MU will report its fourth-quarter fiscal 2022 results after market close on Sep 29.

The Boise, Idaho-based semiconductor company posted top and bottom-line growth in at least double-digit percentage ranges in each of the preceding four quarters. However, this trend is not likely to have continued in the to-be-reported quarter.

Weak Demand and Supply-Chain Woes to Hurt Results

Micron’s fourth-quarter overall 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 resulted in weakening the memory chip demand from the smartphone and personal computer (PC) end markets.

Moreover, Micron’s exposure to PC and notebooks might have hurt its overall sales growth in the quarter under review. PC and notebook manufacturers are adjusting their memory and storage purchases due to the shortage of other components to complete PC assembling.

Micron Technology, Inc. Price and EPS Surprise

Micron Technology, Inc. Price and EPS Surprise
Micron Technology, Inc. Price and EPS Surprise

Micron Technology, Inc. price-eps-surprise | Micron Technology, Inc. Quote

Industry-wide component supply constraints are expected to have hurt Micron’s top and bottom lines in the fourth quarter. MU is witnessing supply constraints for certain integrated circuit components, which are expected to have negatively impacted bit shipments in the quarter under review.

The Zacks Consensus Estimate for the Computing and Networking business unit’s revenues is pegged at $3.27 billion, indicating a year-over-year decline of 13.9%. The Embedded Solutions Group division’s revenues are anticipated to have declined 12.7% to $1.19 billion.

The consensus mark for Micron’s Mobile Business Unit is pegged at $1.68 billion, indicating a year-over-year decline of 11.4%. The Storage Business Unit’s revenues are forecast to plunge 11.8% to $1.06 billion.

Zacks Rank & Stocks to Consider

Currently, Micron carries a Zacks Rank #5 (Strong Sell). Shares of MU have decreased 47.5% year to date (YTD).

Some better-ranked stocks from the broader Computer and Technology sector are Clearfield CLFD, Silicon Laboratories SLAB and Monolithic Power MPWR. Clearfield and Silicon Laboratories each sport a Zacks Rank #1 (Strong Buy), while Monolithic Power carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Clearfield's fourth-quarter fiscal 2022 earnings has been revised upward by 10 cents to 80 cents per share over the past 60 days. For fiscal 2022, earnings estimates have moved 36 cents north to $3.13 per share in the past 60 days.

Clearfield’s earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 33.9%. Shares of CLFD have soared 7.5% YTD.

The Zacks Consensus Estimate for Silicon Laboratories’ third-quarter 2022 earnings has increased 36.1% to $1.13 per share over the past 60 days. For 2022, earnings estimates have moved 20.5% up to $4.41 per share in the past 60 days.

Silicon Laboratories’ earnings beat the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 63.6%. Shares of SLAB have decreased 40.3% YTD.

The Zacks Consensus Estimate for Monolithic Power's third-quarter 2022 earnings has been revised 34 cents northward to $3.49 per share over the past 60 days. For 2022, earnings estimates have moved 95 cents north to $12.56 per share in the past 60 days.

MPWR's earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.8%. Shares of the company have decreased 25.5% YTD.

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