Micron Technology Inc.'s net loss grew in its recently ended quarter and sales fell more than 26 percent, trailing analysts estimate, as the memory manufacturer struggled to balance falling average selling prices with rising demand for its DRAM and NAND flash products.
The Boise, Idaho-based company's net loss widened to $290 million, or 36 cents per share, in the fiscal third quarter ended June 4, from $236 million, or 30 cents per share, in the year-ago quarter. Net sales for the latest quarter dropped to $1.1 billion, slightly below analysts' consensus estimate of $1.18 billion, and well below the $1.5 billion reported in the fiscal 2008 comparable quarter.
Micron's latest quarter was a mixed bag of good and bad news as volume shipment of both NAND flash and DRAM increased and the company benefited from the sale of products previously written down in the preceding quarters, helping to boost gross profit margin on a sequential basis. However, Micron suffered from a sharp decline in average selling prices of its NAND flash to Intel Corp., the company's IM Flash joint venture partner.
"The company's gross margin on sales of memory products improved from negative 30 percent in the second quarter of fiscal 2009 to positive 11 percent in the third quarter, resulting from significant decreases in per gigabit manufacturing costs and the benefit in the third quarter from sales of products previously written down," Micron said in a statement.
Micron has lost money in at least the last ten quarters and analysts expect the company to post losses for its current fiscal year and in fiscal 2010 as the global semiconductor market deals with the fallout from falling average selling prices and the effects of a weak global economy.
The company has taken steps in the last year to reduce its operating costs and has been moving production to higher density 34 nanometer -- for flash products -- and 50 nanometer -- for DRAM -- in an attempt to further improve its cost basis. It has also moved to shutter less cost effective manufacturing facilities, including the 200mm wafer operation in Boise.
Micron's fiscal third quarter results showed improvements from the second quarter when demand stalled across the industry, driving most semiconductor manufacturers deeper into losses.
On a sequential basis, Micron's sales rose 11 percent and analysts see fiscal fourth quarter sales improving sequentially to approximately $1.33 billion with losses also dropping from the preceding quarter.
The company said it closed the just ended quarter with $1.3 billion in cash and short-term investments, an improvement upon the $932 million it had on hand at the end of the immediately preceding quarter but slightly below the $1.36 billion from the comparable year-ago quarter.