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

To: Carl R. who wrote (41679)	12/24/1998 5:40:00 AM
From: Duker	Respond to of 53903

WSJ Article: Micron Technology Posts a Loss, But Semiconductor Prices Improve By RALPH T. KING JR. and DEAN TAKAHASHI Staff Reporters of THE WALL STREET JOURNAL Micron Technology Inc. reported a smaller-than-expected loss of $46 million, or 19 cents a diluted share, for its fiscal first quarter as the market for computer-memory chips continues its slow recovery. The results -- Micron's fourth-consecutive quarterly loss -- reverse year-ago net income of $7 million, or three cents a share. Revenue for the period ended Dec. 3 dropped 17% to $794 million from $957 million. Analysts had expected Micron to post a loss of 28 cents a share, according to First Call. The results were released after the stock markets closed. In New York Stock Exchange composite trading, Micron Technology's shares rose $1.50 to $54. Micron, one of the world's largest memory-chip makers, cited "modest price improvements" in the wake of a three-year price free fall for dynamic random access memory, or DRAM, chips. A price of a megabit of memory fell from an average of $3.75 in 1995 to 16 cents today. The personal-computer boom fueled strong demand for the chips, but too many suppliers expanded too rapidly. The gradual price recovery is expected to continue in 1999 as consolidation and additional factory closings reduce supply. The Semiconductor Industry Association expects DRAM revenue to rise 25% to $16 billion in 1999, after a significant drop in 1998. Since July, Micron has been able to raise its DRAM contract prices, with the mainstay 64-megabit DRAM up about 20% from a low of about $7, said Jonathan Joseph, an analyst at NationsBanc Montgomery Securities in San Francisco. Still, Micron probably won't return to profitability until its fiscal third quarter, analysts say. And prices could drop again if Samsung Electronics Co., another large DRAM maker, which had run its factories at 75% capacity during the past six months, boosts production in coming months, as analysts expect. During the downturn, Micron, based in Boise, Idaho, gained market share and lost less money than its rivals. "Micron has consistently proven that it is the lowest-cost producer," said Dan Hutcheson, president of market researcher VLSI Research Inc. in San Jose, Calif. If the industry continues to recover, analysts believe that Micron will be positioned to surpass Samsung as the largest DRAM maker. In October, Micron acquired the DRAM business of Texas Instruments Inc. for $816 million in stock. And in November, Intel Corp. invested $500 million for a 6% stake in Micron. The deals give Micron nearly $2 billion in cash to invest in its factories at a time when many of its rivals in Asia are strapped for cash. Meanwhile, Micron Electronics Inc., the personal-computer maker controlled by Micron Technology, is also struggling. It reported Monday that sales fell 28% although profit jumped tenfold because of cost-cutting efforts.