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How Micron Technology, Inc. (MU) Soared to Five-Year Highs

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On Wednesday, Micron Technology, Inc. (NASDAQ:MU) will release its latest quarterly results. After years of struggling through tough conditions in the memory-chip space, Micron has finally made investors happy, with its stock rising to levels not seen since before the stock market’s 2008 meltdown.

Micron Technology, Inc. (NASDAQ:MU)

The problem that Micron Technology, Inc. (NASDAQ:MU) has often faced in the past, though, is that brief periods of positive sentiment have given way to downward cycles in demand for memory chips, making it difficult for the company to make any permanent headway. But could this time finally be different for the company? Let’s take an early look at what’s been happening with Micron Technology, Inc. (NASDAQ:MU) over the past quarter and what we’re likely to see in its report.

Stats on Micron Technology

Analyst EPS Estimate $0.02
Year-Ago EPS ($0.32)
Revenue Estimate $2.24 billion
Change From Year-Ago Revenue 3%
Earnings Beats in Past 4 Quarters 0

Source: Yahoo! Finance.

Can Micron Technology’s earnings finally make investors happy?
In recent months, analysts have gotten more optimistic about Micron Technology, Inc. (NASDAQ:MU)’s earnings prospects, reversing initial calls for a quarterly loss and narrowing their full-year fiscal 2013 loss estimates by more than a dime per share. The stock has exploded higher in response, weighing in as one of the S&P 500‘s top performers of the year and climbing nearly 35% just since mid-March.

Micron Technology, Inc. (NASDAQ:MU) started off the quarter on a largely positive note, posting fiscal second-quarter results that included impressive sales growth and better gross margin figures. Revenue from its PC-related DRAM memory surged 24% as the company managed to reduce inventories of the low-margin chips, while the NAND memory that gets used more in mobile technology rose 8%. As the company has been able to reduce its production costs, Micron stands in a better competitive position than it has in the past.

The problem, though, is that Micron needs to boost its prospects if it wants to stand up to its competition. Use of flash memory and solid-state memory drives has greatly increased demand for memory generally, and rivals are working hard to make their own inroads into trying to maximize that demand as long as it lasts. SanDisk Corporation (NASDAQ:SNDK) has not only come out with its own solid-state drives but has also teamed up with hard-disk drive giant Western Digital to produce hybrid solid-state hard-disk drives that combine the benefits of solid-state memory with the cost-effectiveness of traditional hard drives. Even Rambus Inc. (NASDAQ:RMBS) has soared to almost two-year highs thanks to a recent victory in getting SK Hynix to settle a patent dispute with the company, helping Rambus Inc. (NASDAQ:RMBS) to ease the sting of having lost its major suit against Micron Technology, Inc. (NASDAQ:MU) last year.

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