Micron Technology (NASDAQ:MU) is expected to report Q1 earnings after the market close on Tuesday, December 22, with a conference call scheduled for 4:30 pm ET.
The consensus estimate is 7c for EPS and $1.60B for revenue, according to First Call.
Credit Suisse sees upside to its above consensus Q1 estimates of $1.61B and 16c from strong pricing, with DDR2 DRAM contract up 50% quarter-over-quarter and NAND up 20% quarter-over-quarter. Micron remains one of Credit Suisse's top picks as they expect 1) tight memory supply in 2010, with bit growth capped at 40%/60% in DRAM/NAND, 2) DRAM demand upside to 60% with PC refresh and transition to 64-bit OS, and 3) Micron increasing DRAM share from 7% to 12% through Inotera ramp and 50nm conversion.
Looking ahead, Credit Suisse expects Q2 revenues of $1.56B and 14c vs. the Street’s $1.56B and 6c, and assume better than seasonal DRAM ASP declines of down 10% quarter-over-quarter as its checks indicate better than seasonal demand for servers, which is 30% of Micron's DRAM revs. The firm expects tight memory supply in 2010, with minimal capacity growth and bit supply limited to 40% in DRAM and 60% in NAND. Credit Suisse expects further upside to its $12 price target as the market recognizes sustainability of the memory cycle, driving multiple expansion.