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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: phbolton who wrote (39332)	9/29/1998 10:40:00 AM
From: Kathleen capps	Respond to of 53903

For personal use only: Micron Tech Has Smaller-Than-Expected 4th-Qtr Loss (Update1) Boise, Idaho, Sept. 28 (Bloomberg) -- Micron Technology Inc., the world's No. 2 maker of computer-memory chips, reported a fiscal fourth-quarter loss as sales plunged 27 percent on slumping prices for its computer-memory chips. Micron had a loss of $89.1 million, or 42 cents a share, for the three months ended Sept. 3. That compares with profit of $72.1 million, or 33 cents a diluted share, a year ago. The Boise, Idaho-based chipmaker had been expected to report a loss of 54 cents a share, the average estimate of analysts surveyed by First Call Corp. Micron has been hammered by plummeting prices for dynamic random-access memory chips, which tumbled 65 percent in the past 12 months. In recent weeks, Micron said it has been able to raise prices on some products in its contracts with personal-computer makers, though analysts said prices may resume their decline. ''The struggle will continue for the next couple of quarters,'' said analyst Drew Peck of SG Cowen Securities. Sales fell to $692.0 million from $946.2 million. The company said it hasn't been able to cut costs fast enough to cope with falling sales. Boosted by PCs Memory-chip makers were hurt by lackluster demand for PCs in the first half of the year, forcing PC makers to slow production while they tried to get rid of excess inventory. In addition, a glut of manufacturing capacity built when DRAM prices were skyrocketing in 1994 and 1995 resulted in too much supply. The bright spot for Micron was the company's PC business, the majority-owned Micron Electronics Inc. Sales of PC systems jumped to 48 percent of Micron Technology's sales in fiscal 1998 from 42 percent in 1997. Unit sales rose and gross margins in the PC business widened as Micron cut costs. ''The results were buoyed by the PC results,'' said analyst Vadim Zlotnikov of Sanford Bernstein & Co. He added that prices for memory chips stabilized in August and probably will be stable or slightly higher in the next few months. Zlotnikov, who has a ''neutral'' rating on the stock, expects the chipmaker to report a narrower loss in the fiscal first quarter and to be profitable in the second quarter. ''Although we cannot yet determine if recent stability in the market will be sustained, current market conditions are encouraging,'' said Micron Chief Executive Steve Appleton in a statement. Micron also had been expected to complete its acquisition of Texas Instruments Inc.'s memory-chip operations by the end of this month. The company said today it expects to close the transaction in the next few months.