Tags: Micron | Profit | Samsung | earnings

Micron Misses Street View Despite Turning Profit, Seals Samsung Pact

Friday, 08 Oct 2010 09:51 AM

Micron Technology Inc. missed quarterly earnings and revenue expectations as weak technology spending by corporations and consumers hurt PC memory chip prices.

Micron also warned Thursday that the rising popularity of tablet computers, such as Apple Inc.'s iPad, would hurt demand for personal computers over the longer term.

The top U.S. maker of memory chips for computers said it had signed a 10-year cross-patent agreement with Samsung Electronics worth $275 million, which some analysts said helped bolster Micron's technology credentials.

Shares of Micron, which competes with industry leader Samsung as well as Elpida and Hynix Semiconductor, slid 2 percent in after-hours trade to $6.97, all but erasing a 2.3 percent gain during the regular session.

Micron stock had, like that of its rivals, taken a beating in past months as worries grew about a slowdown in corporate and consumer spending on personal computers after Intel Corp and Advanced Micro Devices trimmed sales forecasts.

"The PC industry was slower, a little worse than we expected," said Stifel Nicolaus analyst Kevin Cassidy. But he was optimistic on the licensing deal because "it shows Micron has a technology advance that Samsung must be interested in."

Industry executives warn that PC demand — still the main driver of memory chip sales for the industry — may continue to soften as new devices such as tablets, which use flash memory, replace desktops and laptops.

"It appears that some of the (slowdown in) demand is being driven by unstable consumer sentiment. But some of the softening in the desktop, notebook space can also be attributed to the success of the tablet PC category," Micron CEO Steve Appleton told analysts on a conference call.

CURTAINS RISE ON INTEL, AMD

Micron's results arrived days ahead of earnings reports from Intel and AMD, which traditionally kicks off the results season for the technology sector.

Micron said net profit was $342 million, or 32 cents per share, in its fiscal fourth quarter ended Sept. 2, compared with a net loss of $100 million, or a loss of 12 cents per share, a year earlier.

That compared with an average expected net profit of $439 million, or 38 cents per share, according to Thomson Reuters I/B/E/S.

Micron and other memory chip were hit in 2009 by one of the worst downturns in decades. Over the past four quarters Micron has posted a net profit.

Revenue grew to $2.5 billion from $1.3 billion a year ago, below the mean forecast of $2.65 billion, boosted by acquisitions such as this year's purchase of flash-memory chip maker Numonyx.

The company, based in Boise, Idaho, posted slightly lower average selling prices and unit sales for dynamic random access memory (DRAM) products.

Its gross margins on core memory products fell to 37 percent in the quarter from 40 percent in the previous three months. Analysts on average had forecast overall gross margins of 31 percent.

© 2017 Thomson/Reuters. All rights reserved.

 
1Like our page
2Share
Companies
Micron Technology Inc. missed quarterly earnings and revenue expectations as weak technology spending by corporations and consumers hurt PC memory chip prices. Micron also warned Thursday that the rising popularity of tablet computers, such as Apple Inc.'s iPad, would hurt...
Micron,Profit,Samsung,earnings
477
2010-51-08
Friday, 08 Oct 2010 09:51 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved