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Micron Shares Fall on Weak Guidance

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Micron  (MU) - Get Micron Technology, Inc. Report shares fell after beating revenue and earnings estimates and saying the near-term outlook is solid, though giving weak financial guidance.

The stock fell 1.6 % to $49 a share in postmarket trading.

Driving the revenue and earnings beat was strength in both NAND and DRAM shipments, the company said. Some of the DRAM strength was seen in gaming sales, which is receiving a 2020 stay-at-home tailwind.

But it was the outlook that investors were discouraged by.

Management did say it expects strength in high-growth areas going forward. "We look forward to improving market conditions throughout calendar 2021, driven by 5G, cloud and automotive growth, and we are excited by the continued momentum in our product portfolio,” said CEO Sanjay Mehrotra. This paints a positive picture of Micron’s direction for the next year, but for the current quarter, Micron guided for revenue at a midrange of $5.2 billion, narrowly missing estimates of $5.27 billion. Adjusted EPS is expected at roughly 47 cents, against estimates of 66 cents.

Here were the reported quarter results against Wall Street expectations:

  • Revenue: $6.06B v. $5.89B (actual: +24% year-over-year)
  • Operating Margin: 21% v. 20.5% (Last year: 14%)
  • Adjusted Earnings Per Share: $1.08 v. 98 cents (+92%)

The stock entered earnings up more than 11% in the past month and trading at 15 times forward earnings, a rich multiple compared to its average of 11 times in the past five years. 

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