Micron May Have Had Largest Ever Loss in Q2

Company expected to report negative gross margins for the first time in 15 years

Micron logo on facade of glass tower office building.

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Key Takeaways

  • Micron will probably post second-quarter EPS of -$1.06 vs. $2.00 in the prior-year quarter.
  • Revenue is expected to fall by more than half.
  • Micron faced weak consumer demand, high inflation, and inventory issues.
  • Citi analysts expect the company to report negative gross margins for the first time since 2008.

Micron Technology Inc. (MU), among the five largest semiconductor companies by revenue, probably will report its largest-ever loss in the second quarter of FY 2023 on plunging revenue amid soft consumer spending and inventory adjustments.

Micron is expected to report a net loss of almost $1.2 billion, its second consecutive quarterly loss. Earnings per share (EPS) is likely to be -$1.06, having swung from $2.00 in the prior-year quarter, according to estimates compiled by Visible Alpha. Predicted revenue of $3.7 billion is half of what it was a year ago. Micron reports results after markets close on March 28.

The computer memory company's financial struggles underscore its difficulty navigating a weakened consumer economy, high inflation, and inventory troubles. Micron is expected to report a write-down on inventory amid industry-wide component and supply constraints in the industrial market. This led data center operators, traditionally major customers, to limit memory and storage purchases.

Citi Research analyst Christopher Danely says Micron could be selling memory chips for less than it costs to make them, resulting in negative gross margins for the first time in about 15 years. Danely also expects a write-down of inventory "in the range of a billion."

Micron shares have lost a quarter of their value in the last year, compared with a 10% decline in the S&P 500 Information Technology Sector Index.

One-Year Total Return for S&P 500 Information Technology Sector Index and Micron
Source: TradingView.
Micron Key Stats
  Estimate for Q2 FY 2023 Actual for Q2 FY 2022 Actual for Q2 FY 2021
Earnings Per Share ($) -1.06 2.00 0.53
Revenue ($B) 3.7 7.8 6.2

Source: Visible Alpha

Article Sources
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  1. Visible Alpha. "Financial Data."

  2. Micron Technology Inc. "Micron Technology to Report Fiscal Second Quarter Results on March 28, 2023."

  3. Yahoo! Finance. "Micron (MU) to Report Q2 Earnings: What's in the Offing?"

  4. Barron's. "Micron Could Miss Wall Street Expectations. Buy the Stock Anyway, Analyst Says."

  5. MarketWatch. "Is Micron selling memory chips for less than they cost to make? That may mean the bottom is near."

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