DOW JONES NEWSWIRES
Micron Technology Inc.'s (MU) fiscal third-quarter loss widened
on lower sales and a write-down on the value of its imaging unit,
but its gross margin turned positive after three negative quarters
as the cost of producing chips fell below their selling price.
The loss was the 10th consecutive quarterly loss for the
memory-chip maker.
Micron, the last U.S. maker of dynamic random-access memory, or
DRAM, chips has suffered from three years of oversupply. Cuts in
manufacturing capacity across the sector have helped to stabilize
prices, but demand remains depressed.
For the quarter ended June 4, Micron reported a loss of $290
million, or 36 cents a share, compared with a year-earlier loss of
$236 million, or 30 cents a share. The latest results included a
$53 million write-down on the value of its imaging unit, which it
plans to spin off this quarter. The amount represents Micron's
expected loss on the sale.
Revenue dropped 26% to $1.1 billion.
Analysts' estimates were for a loss of 43 cents a share on
revenue of $1.18 billion, according to a poll by Thomson
Reuters.
Micron's gross margin rose to 9.7% from 3.2% on lower
manufacturing costs.
Revenue from DRAM chip sales grew 14% sequentially because of an
increase in sales volumes. Revenue from NAND flash-memory chip
sales was flat sequentially while the sales volume climbed 20%. The
average selling price increased for all customers except Intel
Corp. (INTC), Micron's joint venture partner. The price to Intel
was lower because of cost reductions in NAND production.
NAND chips are widely used in consumer electronics, such as MP3
players and digital cameras, while DRAM chips are mostly used in
personal computers.
Meanwhile, memory-chip production climbed significantly from the
second quarter and sales in Micron's imaging unit jumped 53%
sequentially.
Credit Suisse on Wednesday raised its earnings and revenue
projections for Micron, saying it will benefit from the release of
Microsoft Corp.'s (MSFT) Windows 7 this fall as consumers and
businesses upgrade their hardware. Micron also is expected to see
higher sales during the back-to-school shopping season.
Micron's shares closed at $5.30, up 3.1%, and was halted during
after-hours trading. The stock has lost a third of its value in the
past year but has more than tripled from its 18-year low of $1.59
in November.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com