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Micron Technology (MU - Free Report) is scheduled to report first-quarter fiscal 2024 results on Dec. 20.

The company projects a fiscal first-quarter adjusted loss of $1.00 per share. The Zacks Consensus Estimate coincides with management’s guidance and is much wider than the year-ago quarter’s loss of 4 cents per share.

Meanwhile, Micron estimates revenues of $4.7 billion. The consensus mark for revenues is pegged at $4.6 billion, suggesting a 12.6% increase from the year-earlier period’s revenues of $4.09 billion.

The company’s earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing on two occasions, the average surprise being -67.7%.

Let’s see how things have shaped up before this announcement.
 

Micron Technology, Inc. Price and EPS Surprise

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

Factors at Play

Micron’s overall first-quarter performance is likely to have been negatively impacted by soft consumer spending due to inflationary pressure and growing concerns over the global economic slowdown. Softened consumer spending has resulted in weak 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 customers across multiple end markets have been adjusting their DRAM and NAND memory chip purchases amid soft macroeconomic conditions.

The memory chip maker’s heavy dependence on China is a headwind due to the ongoing tit-for-tat trade spat between the United States and China. In May 2023, the Chinese government imposed restrictions on Micron for selling its products in key domestic industries on national security concerns, stating that the memory chipmaker failed to pass a cybersecurity review initiated in late March 2023. Chip sales in China make up approximately 11% of Micron’s total revenues.

Additionally, a higher mix of lower-margin NAND, coupled with low memory prices and a minimal decline in manufacturing costs, is expected to have strained margins.
 

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Micron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Micron currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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