To: REH who wrote (3297 ) 3/17/1998 11:54:00 AM From: Bee-Darn Pang Respond to
MICRON TECHNOLOGY INC. (MU) 33 3/4 CLOSED. It must be bad news when no real effort is made to disclose or reveal earnings figures that take into account special factors that may have affected quarterly data. Such is the case with the latest Micron report. While it is not their duty to make it easy for analysts to derive their comparable numbers, it should be in Micron's interest to make it easy for its shareholders to have comparable figures. The latest fiscal Q2 data show that Micron lost $0.23 a share, including special factors of a gain of $0.18 a share for the sale of its interest in the company's contract manufacturing services unit. Hence, the loss would have been much greater than the First Call estimate of a loss of $0.17 a share. This compares with year-ago profit of $0.19 a share, excluding a gain of $0.48 a share from a realized investment. Sales in the latest period fell 14% to $755.4 million, while gross margins fell significantly to 5% of sales versus Q1 margin of 32%. In fact, its semiconductor memory unit lost $0.26 a share on sales of $283 million, compared with sales of $440 million in the previous quarter. According to Micron, its results were negatively affected by pricing pressures from Asia and just an overall abundance of inventory which prompted in a write-down and created an operating loss. Overall, this was not a very good report which should provide investors with confidence that conditions in the memory market are improving. In fact, it implies that pricing pressures are likely to remain in place which means that more losses can be anticipated if supply cannot be brought under control. Much negative news is already reflected in the stock. However, some selling pressure in Micron shares should be expected today.
