=DJ Micron Tech Dn -2: Analysts Puzzled By Sell-Off Fri
30 Mar 11:44
By Donna Fuscaldo
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Investors disappointed that Micron Technology Inc. (MU)
didn't provide more positive news late Thursday when it reported its
second-quarter earnings, sent the stock down 13% Friday.
But analyst were puzzled by the sell-off.
The stock's drop "doesn't make a lot of sense to me," said Dan Scovel, an
analyst at Needham & Co. "I think what's happening is there wasn't any
incremental news. All the news came out last week and the stock rallied hard."
Last week, Micron, of Boise, Idaho, postponed its earnings news as it waited
for results from its majority-owned unit, Micron Electronics Inc. (MUEI).
Micron Tech did hold a conference call with analysts last week to discuss its
semiconductor business. The company said its revenue would be 23% lower than
analysts expected.
Following that call, shares of Micron Tech rallied on news that excess
dynamic random access memory, or DRAM, inventory is being worked down at
original equipment manufacturers.
Thursday's conference call to discuss the consolidated earnings lacked any
new information, and investors who were buying the stock in anticipation of
more good news showed their disappointment.
Shares of Micron Tech recently traded at $39.50, down $5.75 on volume of 7.6
million. Average daily volume is 9.7 million.
Officials at Micron Tech weren't immediately available for comment.
According to Scovel, Micron's weakness Friday doesn't mesh with what's going
on in the DRAM spot market.
"In our view we have seen a rally in DRAM market prices from products over
the last few days," said the analyst. "It has softened a little bit, but its
still much higher than a week ago."
Micron Tech, which is one of the largest producers of DRAM, would benefit
from price increases. For the second quarter, the company posted a loss of 1
cent, excluding charges.
A Thomson Financial/First Call survey of analysts produced a mean estimate of
a 3 cent loss.
(MORE) DOW JONES NEWS 03-30-01
11:44 AM |
