Does Micron announce a “disaster” for the earnings season?
For most companies, according to their fiscal year, the second quarter earnings season hasn’t started well and hasn’t even officially started yet.
Earlier in the week, HR HR dampened investor expectations for the quarter, and after Thursday’s close, Micron Technology, Inc. MU did the same for its fourth quarter.
The price action in the show and the implications for the wider market make it the pre-market readiness action of the day.
Micron already in decline: Long before Thursday’s news, Micron was heading in the wrong direction. In January, the issue hit a new all-time high at $98.45 but weakened to end the month at $82.27.
Interestingly, this was just above its former all-time high, which was reached in April 2021 at $96.96.
Heading into its third quarter report, the show closed at its lowest level since November 2020, when it ended the day at $55.28.
Q3 EPS Beat overtaken by Guidance Slash: After Thursday’s close, Micron reported quarterly earnings of $2.59 per share, higher than analysts’ consensus estimate of $2.44. Additionally, the company reported quarterly sales of $8.64 billion, matching analysts’ consensus estimate.
The company sharply cut its fourth quarter guidance. The company now expects Q4 adjusted EPS of $1.43-1.83 vs. estimate of $2.62 and sales of $6.8-7.6 billion vs. estimate of $9.05 billion of dollars.
PreMarket Prep’s take on the fundamentals: The initial comments on the question will also apply to several other questions that fall into the same predicament of declining revenue, guidance. or both.
“The way for this market to get some legs is that stocks are going to have to rally on disappointing numbers, the reason being that the next earnings season is going to be a disaster,” the PreMarket Prep co-host said. Denis Dick.
“Demand destruction is going to start showing up and it’s already happening.”
Micron “slammed it on the tips, and rightly so,” he said.
“There was a slight bounce that didn’t hold. Stocks need to rebound from bad news and then you could have a major bottom in place.”
The technical point of view of PreMarket Prep: Dick, who has long been on the issue of a higher price, was hoping that Micron could rally and go green in the session. If that happened, he would consider adding to his current position.
The author of this article has focused on the pure technical aspects. Based on the monthly charts, its November 2020 low ($49.44), which was just above the pre-market low ($50.10), was major long-term support going forward. forward.
Still, based on current price action, it did not look like the pre-market low was going to be breached. In the event of a rebound, it was mentioned that Thursday’s range low ($54.22) would act as resistance.
MU Price Action: At the open, the show attempted to hit Thursday’s low, but was pulled down to $53.96 and reversed course.
The stock ultimately lost 2.95% on Friday, closing at $53.65.
The discussion on the issue from Friday’s show can be found here:
Photo via Shutterstock.