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Micron Tech falls short
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December 20, 2000: 6:11 p.m. ET
Memory-chip maker posts 1Q profit of 58 cents, 2 cents below estimates
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NEW YORK (CNNfn) - Memory-chip and personal computer maker Micron Technology Inc. Wednesday reported a fiscal first-quarter profit that fell two cents below Wall Street expectations.
The Boise, Idaho-based Micron (MU: Research, Estimates), one of the world's leading makers of dynamic random-access memory chips (DRAMs), reported fiscal first-quarter net income of $352 million, or 58 cents a diluted share, compared with $341 million or 60 cents a share reported in first quarter 2000.
Earnings tracker First Call had expected earnings of 60 cents a share.
Operating income fell 5.2 percent to $504 million. Net sales for Micron's semiconductor unit fell 30 percent to $1.6 billion due to a 25 percent decline in megabits shipped and a nearly 10 percent cut in average selling price, the company said.
 Earlier Wednesday, Merrill Lynch cut its price target on shares of Micron, citing oversupply of and lagging demand for memory chips. The price target was cut to $70 from $120.
"Since quarter end, market conditions for our primary products have continued to weaken resulting in significant declines in average selling prices and higher inventory levels," said Micron CEO Steve Appleton in a statement.
Margins for Micron's chip operations were 49 percent in first quarter compared to 58 percent in fourth fiscal quarter 2000. The company attributed the decline to the lower average selling prices of semiconductors and higher costs for chip memory products.
Sales for Micron's personal computer business, Micron Electronics (MUEI: Research, Estimates), gained 8 percent to $287 million. However, the unit fell nearly 3 percent from fiscal fourth quarter's $295 million. Lower sales in the small and medium business market caused Micron's sales to decline from fourth quarter, the company said.
Shares of Micron Technology fell $4.94 to close at $29.81. 
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Micron Technology
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