Micron Technology (MU - Free Report) is scheduled to report second-quarter fiscal 2023 results on Mar 28.

The company projects a fiscal second-quarter adjusted loss of 62 cents (+/- 10 cents) per share. The Zacks Consensus Estimate for the bottom line stands at a loss of 66 cents per share and has been revised downward by 3 cents in the past 30 days. The consensus mark indicates a drastic decline from the year-ago quarter’s earnings of $2.14 per share.

Meanwhile, Micron estimates revenues of $3.80 billion (+/- $200 million). The consensus mark for revenues is pegged at $3.78 billion, suggesting a 51.5% decrease from the year-earlier period’s revenues of $7.79 billion.

The company’s earnings surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being -20.1%.

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 second-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 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 second quarter. 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 industrial end markets are expected to have hurt Micron’s top and bottom lines in the second quarter. MU’s industrial end market customers are 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. 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 -2.90%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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