Micron Technology (MU) Stock Dropped on Weak PC Market

NEW YORK (TheStreet) -- Shares of Micron Technology  (MU) closed down 0.51% to $24.50 on reports that a weak PC market may hurt third quarter earnings, according to Barron's.

Due to continued weakness in demand for personal computers and an oversupply of related semiconductors in Chinese warehouses, there's still a chance that Micron Technology reports a loss as the PC end market continues to struggle, Benzinga noted.

Wedbush analysts believe that new Micron CEO Ernie Maddock is likely to take the bar down low bringing another reset to Street estimates, and the firm is lowering revenue and EPS estimates for the fiscal fourth quarter to $4 billion and 62 cents, respectively, from $4.17 billion and 77 cents.

Micron Technology is expected to announce its third quarter earnings results on June 25.

MKM Partners believes that PC DRAM (Dynamic random-access memory) market continues to remain weak despite the Microsoft (MSFT) Windows 10 and Intel (INTC) Skylake refreshes.

Micron Technology, based in Boise, ID, is a semiconductor devices provider that produces dynamic random-access memory, flash memory, and solid-state drives.

Separately, TheStreet Ratings team rates MICRON TECHNOLOGY INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MICRON TECHNOLOGY INC (MU) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MU's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 1.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.54, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, MU has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, MICRON TECHNOLOGY INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 49.11% is the gross profit margin for MICRON TECHNOLOGY INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.41% is above that of the industry average.
  • You can view the full analysis from the report here: MU Ratings Report

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