Nampa, Idaho--Nov. 21, 1997--Micron Electronics Inc. (Nampa) announced that it expects results of operations for its first quarter of fiscal 1998, ending on November 27, 1997, will reflect a modest increase in net sales compared to the fourth quarter of fiscal 1997, but will reflect significantly lower net income.
Micron Electronics anticipates that consolidated net sales for the first quarter of fiscal 1998 will be nearly 30 percent higher compared to the first quarter of the preceding year and approximately 10 percent higher than the fourth quarter of fiscal 1997. Although the growth in unit sales of PC systems is expected to reflect an approximate 30 percentincrease compared to the same period in fiscal 1997, this level is lower than previously expected by the company. As a result, the company's inventories of PC components increased compared to the level on hand as of the company's fiscal year end. The high level ofinventories in conjunction with increasing price pressure, particularly on notebook products, is expected to adversely affect the company's gross margin for the first quarter of fiscal 1998. In addition, the company's selling, general, and administrative expense is expected to be higher as a percentage of net sales for the first quarter of fiscal 1998 compared to the fourth quarter of fiscal 1997.
As a result of these factors, the company's management currently expects net income for the first quarter of fiscal 1998 to be minimal.
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