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Micron Technology falters
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June 21, 2001: 6:08 p.m. ET
Computer memory chip maker logs much wider-than-expected loss
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NEW YORK (CNNfn) - Stung by a sharp decline in prices, computer memory-chip maker Micron Technology reported fiscal third-quarter financial results Thursday that fell far short of expectations.
After the close of trading, Micron said its net loss from continuing operations for the quarter ended May 31 was $301 million, or 50 cents per share. That compares with a net profit of $274.8 million, or 47 cents per share, during the same quarter a year earlier and is much wider than the 15 cents per share the Street had expected, according to a survey conducted by earnings tracker First Call.
The company's most recent net loss includes an inventory write-down of roughly $260 million.
At $818 million, Micron's fiscal third-quarter sales fell 47 percent from $1.5 billion during the year-ago period.
Micron, which is one of the world's largest suppliers of computer memory chips, said net sales from its semiconductor operations during the quarter were down 24 percent compared to the immediately preceding quarter. The company attributed the sharp drop to an approximate 35 percent decline in its overall average selling prices.
The company said its aggregate work in process and finished goods inventories were considerably higher at the end of the third quarter, principally due its acquisition of a manufacturing facility.
On April 30, Micron (MU: Research, Estimates) completed the acquisition of KMT, a semiconductor wafer fabrication joint venture in which it previously had a 25 percent ownership interest. KMT's results of operations were consolidated with Micron's results as of the date of the acquisition.
Micron's net loss also reflects a $12 million, or 2 cents per share, loss from its discontinued PC business. On May 31, its Micron Electronics (MUEI: Research, Estimates) subsidiary sold off its PC business to Gores Technology Group, and that unit now focuses on providing Web hosting services.
For the first nine months of fiscal 2001, the company said its loss was $47 million, $0.08 per diluted share, on the disposition of the PC business.
Before the markets opened, Micron Electronics posted its results, reporting a loss of $9.1 million, or 9 cents per share, which was in line with Wall Street's expectations.
Shares of Micron Technology rose 87 cents to $37.71 in New York Stock Exchange trade Thursday. Micron Electronics gained 18 cents to $1.48 in Nasdaq trading. 
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