Micron sliding lower after memory chip maker issues mixed guidance for Q1 (68.21 +0.27)
- MU has now posted back-to-back quarters in which it beat EPS and revenue expectations. Encouragingly, gross margin continues to trend in the right direction, coming in at (9.1%) compared to (16.1%) in Q3. That also surpassed the midpoint of its guidance of (10.5)% +/- 2.5%. The upward trend is also expected to continue with MU guiding for non-GAAP gross margin of (4.0%), +/- 2%.
- Offsetting that good news was MU's soft Q1 EPS guidance of ($1.07), +/- $0.07, which fell short of expectations. It's also notable that CEO Sanjay Mehrotra's commentary wasn't as upbeat as it was in last quarter's earnings press release. Recall that Mr. Mehrotra provided a lift for the industry last quarter when he stated that the memory industry has passed through a trough in revenue and that PC and smartphone OEMs have largely worked through their inventory. This time around, he didn't really provide an update regarding the recovery of the memory market.
- So far, fellow memory stocks Seagate Technology (STX) and Western Digital (WDC) are little changed in the wake of MU's report.