Micron Technology Inc, the biggest US maker of computer-memory chips, reported a fiscal fourth-quarter loss as average prices plunged 85 percent and sales slid to their lowest level since 1994.
The loss from operations was US$168.5 million, or US$0.28 a share, compared with net income of US$726.7 million, or US$1.20, a year ago. Sales in the period ended Aug. 30 fell 79 percent to US$480.3 million from US$2.31 billion.
Personal-computer sales have slumped this year as consumers and businesses put off purchases while economic growth slows. PC shipments dropped from a year earlier for the first time since 1986 during the second quarter, according to IDC.
That's pushed the spot-market price of memory chips down 75 percent this year, so the devices sell for much less than they cost to make. "Average selling prices seriously eroded over the past year," Chief Financial Officer Wilbur Stover said on a conference call.
A 128-megabit chip, which sold for almost US$15 a year ago, went for less than US$2 in the recent quarter, he said.
Including a US$289 million inventory writedown in the recent quarter, Micron had a loss of US$0.76 a share. On that basis, the company was expected to lose US$0.34, the average estimate of analysts polled by First Call/Thomson Financial. Forecasts ranged from a loss of US$0.25 to a loss of US$0.45.
Because chip prices vary widely during a quarter, it's hard for analysts to predict the company's results with precision. Sales were expected to be US$694.2 million, according to First Call.
"It's pretty staggering," said Credit Suisse First Boston analyst Tim Mahon, who doesn't own the stock and expected sales of US$737 million.
The final loss in the recent quarter was US$575.5 million, or US$0.96 a share. That includes the inventory writedown and a charge of US$118 million, or US$0.20 a share, for writing down Micron's stake in Interland Inc, formerly Micron Electronics Inc.
The shares of Boise, Idaho-based Micron fell US$1.06 to US$21.24 in regular US trading before the release on Tuesday. They've lost 55 percent of their value in the past year. The stock was little changed after the earnings report.
Chip sales could get even worse in coming months if consumers keep delaying purchases in the wake of the Sept. 11 attacks on the US. IC Insights now expects worldwide semiconductor sales to fall 34 percent this year.
"The third quarter has been miserable, and what looked like a bottom may have only been a crag on the cliff's side," Dan Hutcheson, president of market researcher VLSI Research Inc, wrote in a recent note to clients.
Micron still expects to see a seasonal pickup in demand in coming weeks, during the holiday shopping period, executives said.
Consumer demand has been "somewhat muted" since the attacks, said Mike Sadler, vice president for sales. That's been balanced so far with corporations replacing damaged equipment and computer makers adding more memory in each machine, executives said.
The first few weeks of this quarter have been about even with the last few weeks of the previous one, Micron said.
"The week of Sept. 10 was a slow week for us -- there's no question about it," Sadler said. "Things are happening about like expected, but a lot of different factors are coming into play there."
Micron's megabit shipments in the quarter rose 30 percent from the third quarter and 45 percent from a year earlier as PCs and servers included more memory in each box to handle fancier applications. The company reiterated plans for US$1 billion in capital spending this fiscal year to add tools that build smaller circuits.
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