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Micron net short circuits
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December 15, 1997: 6:28 p.m. ET
Company's two units both report lower-than-expected 1Q results
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NEW YORK (CNNfn) - Making good on a warning of "minimal profits" issued Friday, computer chip manufacturer Micron Technology Inc. and its subsidiary Micron Electronics both reported disappointing first-quarter results Monday.
Micron Technology said it earned $10 million, or 4 cents a share, for its fiscal first quarter, ended Nov. 27, on sales of $955 million.
Analysts surveyed by the First Call Research Network had forecast income of 7 cents a share.
Those results compare with net income of $20.6 million, or 10 cents a share, in the year-ago period.
Micron Technology attributed the downturn to dramatic decreases in the prices of its semiconductor memory chips and a 12 percent decline in gross margins on its semiconductor products compared with the preceding quarter.
Micron Technology shares ended the day unchanged at 22-1/2. There was no movement reported in after-hours trading.
Subsidiary Micron Electronics said Monday it earned $1.1 million, or 1 cent a share, on sales of $558.9 million during the quarter.
Those results were substantially below the net income of $24.8 million, or 27 cents a share, reported in the same period a year ago. They also were well below analysts' expectations. Wall Street's consensus estimate for the company was 6 cents.
Micron Electronics ended the day down 5/16 to 9-5/16. No after-hours trades were reported.
The company blamed the disappointing results on an increase in expenses related to personnel, advertising and other costs associated with the opening of a new support facility in Japan and miscellaneous acquisitions.
"Sales in the first quarter... did not meet our expectations and resulted in higher levels of PC inventories during the quarter. On the positive side, unit sales of notebook products were 45 percent higher compared to the fourth quarter of fiscal 1997," said Joseph M. Daltoso, Micron Electronics' chairman and chief executive officer.
He said the industry-wide decline of semiconductor memory products also added to the company's financial difficulties.
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