Although I suspect that MU investors may think otherwise, I appreciate the comments by T. Weisel Partners in connection with their MU downgrade.....they are still willing to consider the possibility that PC sale problems may be company specific.
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Micron Technology tumbles amid PC sales concerns
PALO ALTO, Calif., Oct 5 (Reuters) - Shares of Micron Technology Inc., the biggest U.S. maker of memory chips, tumbled 13 percent on Thursday, despite stronger-than-expected earnings, amid persistent concern that the demand for personal computers is waning somewhat.
Micron shares <MU.N> fell $6 to $40-15/16 on the New York Stock Exchange after earlier falling as low as $40-3/4. Shares have risen 21 percent this year but are well off their year-high of 97-1/2 reached July 14.
"An overhang of DRAM inventory and disappointing PC demand temper the outlook," wrote SG Cowen Securities Corp. analyst Rick Billy in a note to clients.
After the market close on Wednesday, Boise, Idaho-based Micron reported fiscal fourth-quarter earnings that easily topped analyst forecasts. For the period ended Aug. 31 it had net income of $726.7 million, or $1.20 a share, compared with a year-ago loss of $17.4 million, or 3 cents. Sales more than doubled to $2.57 billion from $1.08 billion.
That was ahead of analyst forecasts for 96 cents a share, according to First Call/Thomson Financial.
Micron's earnings came as Dell Computer Corp. <DELL.O> warned that Dell could miss its targeted sales growth rate of 30 percent this year. The Round Rock, Tex.-based PC maker warned of weakness in Europe, and in small business and government sectors.
Intel Corp. <INTC.O>, the world's largest chipmaker, warned last month that its sales would miss analysts' forecasts due to weak demand in Europe. And Apple Computer Corp. <AAPL.O> also warned that sales for its colorful iMac and other computers were weak in every geographical region.
"We are downgrading our rating (for Micron Technology) to buy from strong buy until we have more conviction of PC demand in the fourth quarter," wrote Thomas Weisel Partners analyst Eric Ross in a note to clients. "We believe fourth quarter PC demand will be typical, providing potential upside to investors' expectations; we await data supporting this thesis."
18:38 10-05-00
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