3 Stocks to Watch on Friday: Micron Technology, Inc. (MU), GameStop Corp. (GME) and Inventure Foods Inc (SNAK)

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Thursday was another weak day for U.S. equities as the market keeps one eye on Washington and healthcare reform. The S&P 500 Index slipped 0.1%, the Dow Jones Industrial Average fell a fraction of a percentage and the Nasdaq Composite fell 0.1% on Thursday.

3 Stocks to Watch on Friday: Micron Technology, Inc. (MU), GameStop Corp. (GME) and Inventure Foods Inc (SNAK)The earnings slate is thinning, but Micron Technology, Inc. (NASDAQ:MU) and GameStop Corp. (NYSE:GME) both set off fireworks after their earnings reports — for very different reasons. Meanwhile, Inventure Foods Inc (NASDAQ:SNAK) is making its own waves this morning on a big headline in its own right.

Here’s what you need to know heading into this week’s final trading day:

GameStop Corp. (GME)

GME shares, however, were not quite so lucky.

The video game store chain fell by double digits Friday morning after posting a slight fourth-quarter earnings beat but missing on the top line.

The company earned $208.7 million on a GAAP basis, which came to $243.8 million, or $2.38 per share, on an adjusted basis. That was enough to top expectations of $2.29 per share.

However, GameStop’s revenues of $3.05 billion were off 14% year-over-year and a hair shy of estimates for $3.06 billion. The top line was hurt by a massive 16% decline in comparable-store sales. Also, per the company:

“As stated in the company’s holiday sales release in January, the fourth quarter was significantly impacted by weak sales of certain AAA titles and aggressive console promotions by other retailers on Thanksgiving Day and Black Friday. As a result, new hardware sales declined 29.1% and new software sales declined by 19.3%.”

Worse, pre-owned sales actually outdid new video games — seemingly a good sign because of the higher margins, but worrisome because of the overall trend as more game sales are delivered digitally. That’s one of the biggest trouble spots for GameStop as investors try to weigh the sustainability of the business versus a yield that has been ballooning thanks to declining share prices, and will be well more than 7% by Friday’s open.

GME shares were off 12% in Friday’s early action.

Micron Technology, Inc. (MU)

MU shares were headed through the roof Friday morning after the company unveiled one heckuva fiscal second-quarter earnings beat.

Micron posted GAAP profits of 81 cents per share, which when adjusted for one-time items came to a 90-cent profit. That was well more than enough to top expectations of 80 cents per share, and it even got over a lofty “whisper number” of 89 cents. Meanwhile, revenues of $4.65 billion were just enough to clear estimates for $4.64 billion.

Surging chip prices, thanks in large part to demand for chips used for smartphone storage, were to thank for Micron’s boffo quarter. Reuters pointed out that analysts are deeming this an “ultra-super-cycle” pairing supply bottlenecks amid soaring demand thanks to growing trends such as the internet of things and autonomous driving.

Said Micron CEO Mark Durcan:

“Strong demand and limited industry supply for NAND and DRAM solutions, combined with significant progress on our cost reduction plan, produced excellent results for our second quarter.”

Looking forward, the company said it would earn $1.43 to $1.57 per share on revenues of $5.2 billion to $5.6 billion for the current quarter. Both pieces of guidance clocked expectations for 90 cents of profit per share on revenues of $4.72.

As a result, MU stock is up more than 11% in Friday’s premarket trade. Those returns will be tacked onto a mostly unfettered year-to-date gain of 21%.

Inventure Foods Inc (SNAK)

Lastly, SNAK sales are rising after making a strategic sale of its Fresh Frozen Foods brand.

Inventure Foods, a collection of natural and specialty snack food brands, will sell Fresh Frozen Foods to the Pictsweet Company for $23.7 million in cash. CEO Terry McDaniel said the move will help the company reduce debt, improve the balance sheet and help SNAK’s financial flexibility.

Fresh Frozen Foods focuses on a variety of healthy frozen items, including vegetables, fruits and mixed products such as smoothies. And it hasn’t been a part of the Inventure family for long — SNAK only completed the acquisition of the brand in late 2013.

SNAK shares are up 10% on the news.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/3-stocks-to-watch-on-friday-micron-technology-inc-mu-gamestop-corp-gme-and-inventure-foods-inc-snak/.

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