Micron (MU) stock dipped 11% after its Q4 of fiscal 2019 earnings. This slump occurred after the stock rallied about 20% in September on analysts’ optimism.
Micron Technology reported upbeat fourth-quarter fiscal 2019 results on September 26 after the market closed. Micron stock fell 1.76% to $48.60 on the day.
Micron Technology (MU) stock is in the spotlight this week, as the company is set to release its fiscal 2019 fourth-quarter results on Thursday after markets close.
The US markets are up today as Wall Street braces for a busy earnings week. The S&P 500 ETF is up 0.3%, and semiconductor stocks lead the market’s gains.
On June 25, Micron Technology (MU) reported better-than-expected earnings results for the third quarter of fiscal 2019, which sent the stock up 13.3% a day after its earnings release.
The first-quarter semiconductor earnings season has begun, and the stock market is showing bullish sentiment as investors buy ahead of earnings releases.
In fiscal 2018, AMAT’s revenue rose 19% YoY to $17.25 billion, while its non-GAAP (generally accepted accounting principle) net income rose 29.6% YoY to $4.57 billion.
The semiconductor market is seeing demand weakness, especially in China. SME (semiconductor manufacturing equipment) suppliers are also seeing demand weakness.
The Trump administration announced that its 10% tariff rate on Chinese goods would increase to 25% on January 1, 2019, if no negotiation could be reached.
Because Applied Materials (AMAT) is positioned at the beginning of the supply chain, its stock is among the first to be impacted by any industry-wide news.
According to SEMI’s estimates, the global semiconductor market is expected to grow at a CAGR (compound annual growth rate) of 6.7% between 2015 and 2025.
The emergence of the IoT (Internet of Things), self-driving cars, AR/VR (augmented/virtual reality), and AI (artificial intelligence) is driving demand for logic and memory chips.
Applied Materials (AMAT) stock has risen 86% over the past 12 months to the 17-year high of $44. In this series, we’ll look at the factors driving Applied Materials’ fiscal 2017 earnings.
AMAT’s FCF (free cash flow) increased significantly in fiscal 2Q16 when the company started reporting revenue growth after several quarters of decline.
The company aims to increase its EPS (earnings per share) from an estimated $1.75 in fiscal 2016 to $2.8 in fiscal 2019, growing at a CAGR (compounded annual growth rate) of 17%.
On July 28, 2016, Oracle (ORCL) and NetSuite (N) announced a merger. Oracle will purchase NetSuite for $109 per share, or $8.6 billion net of cash and debt.
Oracle (ORCL) co-founder Larry Ellison and his family control 45% of NetSuite (N) stock. So it’s theoretically possible but not likely that a company could make a hostile bid.
NetSuite agreed to a non-solicitation agreement with a fiduciary out. This means that during the pendency of the merger, NetSuite may not contact other potential buyers.
With most mergers, the rate of return is driven by the time it takes to finalize the transaction. For Oracle (ORCL) and NetSuite (N), the timeline will be driven by the antitrust waiting period.
Arbitrageurs will certainly be interested in setting up the ARM Holdings (ARMH) spread, especially if they can get an 8% return using the ordinary shares.
Softbank decided to waive any antitrust or regulatory conditions to the transaction. It doesn’t care if the regulators have issues—it’s buying the company.
LinkedIn will be a standalone entity within Microsoft. This transaction is part of Microsoft’s plan to focus on cloud-based offerings. It wants to rely less on PCs.
Higher leverage in an industry like the semiconductor space, which has volatile earnings, constrains the company’s financial flexibility by adding a fixed cost of interest.
SEMI (Semiconductor Equipment and Materials International) forecasts global SME sales to rise 1.4% YoY in 2016, after an estimated fall of 0.6% YoY 2015.
The KLA-Tencor–Lam Research merger includes a disproportionate effect clause, which means the carve-outs may, in fact, be a MAE if they disproportionately affect KLA-Tencor.
Both KLA-Tencor and Lam Research serve Samsung and Taiwan Semiconductor. Improving service to big customers is a major driver for the KLA-Tencor–Lam Research merger.
According to the press release, the SanDisk-Western Digital merger is expected to close in the third quarter of 2016. If you assume a closing date of September 30, 2016, then the spread is trading at an annualized rate of 14.5%.
In the KLA-Tencor–Lam Research merger, Lam Research (LRCX) doesn’t have to agree to any divestitures or behavioral restrictions that materially affect the deal, but it does have a $290 million reverse termination fee.
In the press release announcing the Lam Research-KLA-Tencor merger, the companies mention they will serve approximately 42% of the wafer fabrication equipment market immediately upon closing.
The equity value of the KLA-Tencor–Lam Research merger is about $10.6 billion using the closing price of Lam Research on October 20, the day before the deal was announced.
Applied Materials generated investor returns of -32.38% in the trailing 12-month period, -9.36% in the trailing one month, 43.68% in 2014, and -38.24% YTD.
Applied Materials provides manufacturing equipment, services, and software to the global semiconductor industry. It has a market cap of $18.68 billion.
