Q1 Preview: Weak DRAM Pricing to Weigh on Micron's (MU) Q1 Results
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Price: $966.78 -0.77%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.8%
EPS Growth %: +928.4%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.8%
EPS Growth %: +928.4%
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Micron Technology, Inc. (NYSE: MU) shares are higher ahead of the company's first quarter earnings, expected out after the market closes today. Shares are up 0.4% today.
Micron is expected to report an EPS of $0.30 on revs of $2.38 billion. Last quarter, the Boise, ID-based semi manufacturer reported an EPS of $0.32 on revs of $2.49 billion, shy of the consensus EPS of $0.39 and revs of $2.67 billion. Last year, for Q110, MU produced an EPS of $0.23 with revs of $1.74 billion, easily beating Street views calling for an EPS of $0.06 with revs of $1.59 billion.
Shares gained about 8% through the quarter to $7.27 at the end of November. The stock is up 12% since the end of the quarter, but down 25% on the year.
A simple valuation has Micron with a forward P/E of 7.5x FY11 EPS estimates and 6.6x FY12 EPS estimates.
Data from Bloomberg has 14 analysts with a Buy on WAG, 9 with a hold, and one suggesting to Sell. The analyst price target average is $11, with a high of $18 and low of $6. Over the last year, shares have traded in a range from $1.59 to $11.40.
Summary
Goldman Sachs is expecting weak results right along with guidance, "guidance driven by a significant deterioration in DRAM pricing during the quarter." DRAM prices dropped 30% through the quarter, which was significantly below managements expectations. Goldman notes that "at the time of Micron’s [Q410] earnings call management expected trade NAND ASPs to be down in the high-teen percentage range and DRAM ASPs to be down in the mid-high single-digit percentage range, assuming prices remained flat for the remainder of the quarter."
Goldman thinks that supply/demand excess capacity is expected to persist through Q3 of 2011. "While NAND fundamentals should hold up significantly better than DRAM driven by robust demand from tablets and smartphones, DRAM still accounts for approximately 50% of Micron’s revenues (with core DRAM only 40%)."
Goldman has a Hold rating on the shares, with a price target of $6. They're looking for an EPS of $0.29.
Micron Technology, Inc. is expected to release their Q111 earnings on Wednesday, December 22, 2010, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
Micron is expected to report an EPS of $0.30 on revs of $2.38 billion. Last quarter, the Boise, ID-based semi manufacturer reported an EPS of $0.32 on revs of $2.49 billion, shy of the consensus EPS of $0.39 and revs of $2.67 billion. Last year, for Q110, MU produced an EPS of $0.23 with revs of $1.74 billion, easily beating Street views calling for an EPS of $0.06 with revs of $1.59 billion.
Shares gained about 8% through the quarter to $7.27 at the end of November. The stock is up 12% since the end of the quarter, but down 25% on the year.
A simple valuation has Micron with a forward P/E of 7.5x FY11 EPS estimates and 6.6x FY12 EPS estimates.
Data from Bloomberg has 14 analysts with a Buy on WAG, 9 with a hold, and one suggesting to Sell. The analyst price target average is $11, with a high of $18 and low of $6. Over the last year, shares have traded in a range from $1.59 to $11.40.
Summary
Goldman Sachs is expecting weak results right along with guidance, "guidance driven by a significant deterioration in DRAM pricing during the quarter." DRAM prices dropped 30% through the quarter, which was significantly below managements expectations. Goldman notes that "at the time of Micron’s [Q410] earnings call management expected trade NAND ASPs to be down in the high-teen percentage range and DRAM ASPs to be down in the mid-high single-digit percentage range, assuming prices remained flat for the remainder of the quarter."
Goldman thinks that supply/demand excess capacity is expected to persist through Q3 of 2011. "While NAND fundamentals should hold up significantly better than DRAM driven by robust demand from tablets and smartphones, DRAM still accounts for approximately 50% of Micron’s revenues (with core DRAM only 40%)."
Goldman has a Hold rating on the shares, with a price target of $6. They're looking for an EPS of $0.29.
Micron Technology, Inc. is expected to release their Q111 earnings on Wednesday, December 22, 2010, at approximately 4:00pm EST. Stay tuned to StreetInsider.com's EPS Central section to see our analysis of the highly-anticipated quarterly results withi0 n seconds of their release.
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