What To Watch For In Micron’s Q1 Earnings

by Trefis Team
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After a strong performance over the past few quarters, we expect Micron (NYSE:MU) to post another strong quarter when it reports its fiscal Q1 2018 earnings on December 19th. The company expects revenue between $6.1 and $6.5 billion, with the midpoint indicating over 58% year-over-year growth. The company has been able to sustain growth in both its top line and bottom line due to favorable industry trends. Micron’s stock price has more than doubled over the year, largely due to the company’s growth outlook. Global DRAM prices have been on the rise since June 2016, on account of higher DRAM content in mobile devices and significant under-supply of PC DRAM and a slowdown in capacity expansions. Prices should remain firm over the next year as well, with Global DRAM bit supply forecast to grow by 19.6 % in 2018, with bit demand growing at a higher rate. The company continues to see a positive industry environment, which – combined with additional bit growth from current technologies and progress on deploying the next-generation technologies into manufacturing – suggests a positive long-term outlook.

We have a $45 price estimate for Micron’s stock, which is slightly below the market price.

Production technology execution. as well as the bit growth and cost reductions, has enabled Micron to significantly strengthen its cash flows and financial performance in the last few quarters. Micron expects the favorable demand-supply environment to persist into 2018, supported by continued strong growth in both DRAM and NAND demand, reflecting broader trends in the data center and mobile markets as well as increased adoption of SSDs across enterprise, cloud and client PCs.

In addition to the positive pricing environment and higher bit volumes in DRAM and NAND, the improving product mix (towards higher value-add solutions) is an important factor driving the company’s growth momentum. Moreover, Micron, along with Samsung and SK Hynix, controls much of the supply in the DRAM market.

See our complete analysis for Micron here

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