K, from bloomberg news <<Micron Technology Reports Larger-Than-Expected Loss (Update1)
(Adds analyst's comment in 5th paragraph, Micron Electronics
results, details from earnings report at end.)
Boise, Idaho, March 16 (Bloomberg) -- Micron Technology Inc.
reported a larger-than-expected loss in the fiscal second
quarter, hurt by falling prices for its computer memory chips.
Micron said it lost $86.8 million, or 41 cents a share, from
operations in the quarter ended Feb. 26, compared with a profit
from operations of $38.9 million, or 18 cents, a year ago.
Analysts had expected Micron to lose 16 cents a share in the
quarter, according to IBES International Inc.
Sales fell 14 percent to $755.4 million from $876.2 million.
Micron is losing money because rivals in South Korea and
elsewhere built a slew of new factories after prices for dynamic
random access memory (DRAM) chips skyrocketed in 1994. Now there
are too many plants pumping out the devices. DRAMs are the most
common memory chips uses in personal computers and other devices.
''The DRAM market has been bloody,'' said Bruce Bonner, an
analyst at Dataquest in San Jose, California, who said he doesn't
expect the market to improve until the end of 1999.
Prices for dynamic random access memory chips, the most
common memory chips, have fallen to less than $3 apiece from more
than $8 a little more than a year ago. Boise, Idaho-based Micron
is one of the largest DRAM makers in the world, along with
Samsung Electronics Co. and LG Semiconductor Co., both of South
Korea.
Micron said its DRAM business has been ''severely impacted''
by competition from Asian rivals. Some analysts suspect that
competition has intensified recently as South Korean companies,
strapped for cash by an economic crisis in the country, shipped
as many chips as possible to raise money.
Profit Margins Narrowing
Micron's gross profit margin on memory chips -- the
percentage of revenue left over after subtracting product costs |
