Memory-chip maker Micron Technology on Tuesday raised its guidance for revenue and earnings in the current quarter, citing an improved supply and demand balance and better pricing. But MU stock fell after the update.
Boise, Idaho-based Micron now expects to lose an adjusted $1 a share on sales of about $4.7 billion in its fiscal first quarter ending Nov. 30. The company previously forecast losing an adjusted $1.07 a share on sales of $4.4 billion. Analysts polled by FactSet had been expecting Micron to lose $1.04 a share on sales of $4.4 billion.
In the year-earlier period, Micron lost an adjusted 4 cents a share on sales of $4.085 billion.
Micron's guidance calls for sales to increase 15% year over year in the current quarter. That would be a turnaround from five consecutive quarters of declining sales as of its fiscal fourth-quarter report in September.
However, some Wall Street analysts expressed disappointment with Micron's higher-than-expected operating expenses for the period.
MU Stock Is A Recent Breakout
On the stock market today, MU stock slid 1.8% to close at 76.12.
On Nov. 3, Micron shares broke out of a flat base at a buy point of 72.31, according to IBD MarketSmith charts.
MU stock notched its all-time high of 98.45 back in January 2022.
Micron updated its fiscal Q1 outlook ahead of the 2023 UBS Global Technology Conference in Scottsdale, Ariz. Chief Executive Sanjay Mehrotra and Chief Financial Officer Mark Murphy were scheduled to speak at the conference.
Analysts React To News
Micron's guidance increase was not surprising given that its prior outlook was "extremely conservative," Wedbush Securities analyst Matt Bryson said in a client note. Bryson rates MU stock as outperform with a price target of 80.
"With conditions in memory markets improving, we continue to like MU (and the broader sector) as we expect financials will show substantial progress over the next few quarters, with shortages (and traditional peak cycle conditions) likely appearing in our view later in 2024 as standard server demand normalizes," he said.
Wells Fargo analyst Aaron Rakers maintained his overweight rating on MU stock with a price target of 82.
Micron also reiterated its view that 2025 will be a record year for the memory industry, Rakers said in a note to clients.
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