Component shortage mars Micron's PC sales
By Claire Serant
Electronic Buyers' News
(12/21/99, 04:27:18 PM EDT)
A shortage of key components prevented Micron Electronics Inc. from shipping larger volumes of notebooks in its first fiscal quarter of 2000.
As a result, the PC maker's top-line fell 12.5%, to $353 million compared with $403.5 million in the first fiscal quarter of 1999.
The Nampa, Idaho, company reported first-quarter net earnings of $14.6 million, or 15 cents a share, compared with $11.7 million, or 12 cents a share, for the same period a year ago.
Although the company beat analysts' consensus earnings estimates by a penny, Micron Electronics' nagging PC woes dragged shares down 1 1/4, or 10%, to 11 1/8 midday Tuesday.
"During the past quarter we faced a number of challenges that impacted our PC business, including component supply shortages in the notebook business and aggressive pricing by competitors in the government sector," said Joel Kocher, Micron Electronics' chairman and chief executive, in a statement.
Micron Electronics' PC sales dropped to $259 million in the first-quarter of fiscal year 2000, compared with $364 million in the first quarter of fiscal year 1999. Company executives attributed the decline to a 41% reduction in notebook sales caused partly by limited component supply following Taiwan's earthquake in September, as well as weakness in the consumer and government PC sectors.
Sequentially, Micron Electronics said PC sales were down more than 4% from $270 million in the fourth quarter of 1999, citing fewer shipments of PCs, partly due to limited supply of 733-MHz desktop processors.
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