) to beat expectations when it reports third-quarter fiscal 2014
results on Jun 23, 2014. In the last quarter, the company posted a
positive earnings surprise of 39.3%.
Why a Likely Positive Surprise?
Our proven model shows that Micron is likely to beat earnings
because it has the right combination of two key components.
Positive Zacks ESP:
Micron currently has an
of +1.41%. This is because the Most Accurate Estimate stands at 72
cents, while the Zacks Consensus Estimate is pegged at 71
Micron sports a Zacks Rank #1 (Strong Buy). Note that stocks with
Zacks Rank #1, 2 and 3 have a significantly higher chance of
beating earnings estimates. The Sell-rated stocks (#4 and 5) should
never be considered going into an earnings announcement.
The combination of Micron's Zacks Rank #1 and +1.41% ESP makes
us very confident of a positive earnings beat.
What is Driving Better-than-Expected Earnings?
The underlying driver is of course the favorable outlook for the
memory market that bodes well for Micron's success.
Micron is expected to benefit from the strong demand for NAND
flash-memory chips, used in smartphones and tablets. Driven by new
tablet products and greater adoption of solid state drive (SSD),
total demand in the NAND flash memory industry could surpass
manufacturing capacity, leading to periodic shortage and higher
pricing in the near term.
Management is optimistic about continued strength in the NAND
and DRAM markets in 2014. Moreover, the acquisitions of Rexchip and
Elpida have increased Micron's chances to gain traction in the
However, it may not be easy for Micron to take share from
) - a dominant NAND market player.
Stocks that Warrant a Look
Here are a couple of companies that you may want to consider as
our model shows they have the right combination of elements:
) has an Earnings ESP of +0.73% and a Zacks Rank #2 (Buy).
) has an Earnings ESP of +0.72% and a Zacks Rank #3 (Hold).
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