Micron Upbeat on Third Quarter ( it's getting a "little bit" better all the time , do tee doo tee doo;-)
Tuesday June 10, 9:05 pm ET
LOS ANGELES (Reuters) - Micron Technology Inc. (NYSE:MU - News), the No. 2 maker of computer memory chips, on Tuesday said its current quarter is going "a little bit better" than expected, due to strong chip production and cost cutting.
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Micron spokesman Kipp Bedard, speaking at a Bear Stearns technology conference in New York, also said that Micron customers have indicated that they are shipping more personal computers this quarter than they had expected.
"We are coming in a little bit better than guidance," Bedard said.
Micron is cutting costs as part of a restructuring that stems in part from the worst downturn in demand for semiconductors on record. The chip company, which is cutting some product lines and trimming its work force, has not posted a profit in more than two years.
Bedard said Boise, Idaho-based Micron now expects to beat its earlier projections for production growth. In March, the company told investors to expect third quarter production to grow in the "mid-teens" percent over the second quarter.
The company also said that cost cuts were ahead of the target for a 10 percent reduction from the second quarter. It said it expects to chop its cost per megabit by 50 percent in calendar 2003 instead of 40 percent.
Micron, which is second only to Samsung Electronics Co. (KSE:05930.KS - News) in memory chip production, also said that it expects capital spending on equipment it needs to make chips to be higher in fiscal 2003 than it had first forecast.
Bedard said the company expects capital spending to be close to $1.1 billion, rather than the $1 billion it had previously forecast.
In addition, Micron said PC makers are seeing a smaller-than-expected drop in unit shipments. U.S.-based PC makers include No. 1 PC maker Dell Computer Corp. (NasdaqNM:DELL - News), Hewlett-Packard Co. (NYSE:HPQ - News) and Gateway Inc. (NYSE:GTW - News).
"Our customers went into the calendar second quarter thinking that their shipment of (computer) boxes would be down in the high-single digits," he said. "More recently they have indicated to us (the decline) may be more mid-single-digits."
Bedard said business in the U.S. has been stronger in the quarter than expected for its customers while Asia has stabilized after being shaken up in recent months by the deadly SARS virus and the U.S.-led war in Iraq.
Analysts expect the company to report a loss of $2.25 per share in fiscal 2003, which ends in August.
Shares of Micron rose to $13.15, up 84 cents, or nearly 7 percent on the New York Stock Exchange (News - Websites).
Micron has shut a production line in Virginia that had been focused on 200-millimeter silicon wafers although the company has kept an operation there working on next-generation 300-millimeter wafers. |
