Micron Technology (MU) Stock: Climbing On Earnings Beat

Micron Technology, Inc. (NASDAQ: MU) is making a run for the top in the market today, and for good reason. The company released its Q2 financial results, beating expectations.

As you would imagine, this news excited investors, sending the stock well into the green. Today, we’ll talk about:

  • The financial results;
  • what we’re seeing from MU stock as a result; and
  • what we’ll be watching for ahead.

MU Gains On Financial Results

As mentioned above, Micron Technology is making its way for the top in the market this morning after reporting its financial results. Of course, the results topped expectations, leading to the excitement. Here’s what we saw:

  • Adjusted Non-GAAP Earnings – During the second quarter, MU reported adjusted non-GAAP earnings in the amount of $1.71 per share. While this figure was down about 40% on a year over year basis, it did come in $0.04 ahead of what analysts epected to see.
  • Revenue – In terms of revenue, the company also did well. During the quarter, the company said that it generated $5.84 billion in revenue. Once again, this figure is down substantially (20.55%) year over year. However, analysts expected a worse outcome with a revenue target of $5.82 billion.
  • Guidance – The company also said that it plans on cutting capital expenditures by $9 billion in the current year. Also, revenue is expected to come in between $4.6 and $5 billion in the current quarter.

In a statement, Sanjay Mehrotra, CEO at MU, had the following to offer:

We believe that 5G, foldable phones and upcoming innovations in augmented and virtual reality will drive sustained content growth for years to come and should reignite smartphone unit sales beginning in calendar 2020.

In the data center market, the demand for memory has moderated this year following exceptional growth in the last two years.

The slowdown in demand is a result of ongoing customer inventory adjustments, as well as software optimizations at some cloud customers. We expect growth to resume in the second half of calendar 2019 as we see improvement in our customers’ inventory position.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Micron Technology, the news proved to be positive.

While both earnings and revenue were substantially lower than they were the year prior, the company beat analyst expectations. With expected year over year decline already priced into the market, the beat on earnings and revenue led to excitement among investors.

As is just about always the case, our partners at Trade Ideas were the first to alert us to the movement. At the moment (10:23), MU is trading at $43.59 per share after a gain of $3.46 per share or 8.92%.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on MU. In particular, we’re interested in following the story surrounding the company’s continued work to bring growth back. While the chip market is expanding, the company’s revenues are declining. We’re looking forward to seeing how effective the company is in turning it around.

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