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CNNfn after the bell
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December 23, 1998: 6:32 p.m. ET
Chipmaker Micron posts first-quarter loss of 19 cents but bests estimates
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NEW YORK (CNNfn) - Hampered by lower prices for its computer memory chips and higher manufacturing costs, Micron Technology Inc. posted a net loss of 19 cents per diluted share in its fiscal first quarter, but the company still handily beat Wall Street expectations for an even greater profit erosion.
The Boise, Idaho-based semiconductor maker incurred the loss despite an 8 percent increase from the previous quarter in the average selling price of one of its primary memory chips, the 64-MB SDRAM. The price hike marked a sharp reversal from fiscal 1998, when average selling prices for the chip declined 60 percent.
The chipmaker reported a net loss of $46 million, or 19 cents per diluted share in the fiscal first quarter ended Dec. 3, down from a profit of $7 million, or 3 cents per share a year earlier. Wall Street analysts had forecast a loss of 28 cents per share.
Sales in the year-to-year period fell from $957 million to $794 million.
Micron Technology said the price improvements gave a boost to gross profit margins, which represented 9 percent of revenues on semiconductor products in the latest quarter, compared with a negative 10 percent in the fiscal fourth quarter.
The company said unit sales of its PC systems rose 2 percent from the year-earlier period, and 21 percent from the fiscal fourth quarter amid aggressive efforts to lower prices.
The earnings report comes at a time when the entire semiconductor industry is laboring to stave off the effects of intense price competition and weaker demand for its products from the recession-racked Asian region.
Micron Electronics, a direct-sales PC maker, accounts for about 40 percent of Micron Technology's $3 billion in annual revenues. Texas Instruments owns 16 percent of Micron Technology.
Shares of Micron (MU) ended up 1-1/2 at 54 Wednesday on the New York Stock Exchange.
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