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Micron beat analysts' expectations
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Thursday, March 24, 2011
Memory chip vendor Micron Technology Inc. Wednesday (March 23) reported revenue and earnings for the quarter ended March 3 that beat consensus analysts' expectations, and the company's CEO said Micron hadn't determined whether supply chain hiccups in the wake of the recent earthquake in Japan would help or hurt the company's business.
Micron (Boise, Idaho) reported sales for the quarter of $2.3 billion, flat with the previous quarter and up 15 percent from the year-ago quarter. The company posted a net income of $72 million, or 7 cents per diluted share, down from a net income of $155 million in the previous quarter and $365 million in the year-ago quarter.
Micron's numbers for its second quarter of fiscal 2011 came in above consensus analysts' expectations, which called for revenue of $2.1 billion and earnings of 3 cents per share, according to Yahoo Finance.
Revenue from sales of DRAM products declined 6 percent from the previous quarter due to a 23 percent decrease in DRAM average selling prices (ASPs), which was largely offset by an increase in volume, Micron said.
Sales of NAND flash chips increased 8 percent compared to the previous quarter due to an increase in volume that was partly offset by a 4 percent decrease in NAND ASPs, Micron said. NOR flash revenue declined 7 percent from the previous quarter primarily because of a decrease in NOR ASPs, Micron said.
Micron said its consolidated gross margin for the quarter slipped to 19 percent from 23 percent in the previous quarter. Micron blamed the gross margin decline on ASP decrease, partly offset by lower manufacturing costs.
Micron reported that it spent $840 million on capital expenditures during the quarter.
Demand signals from Micron customers are good, particularly in NAND and DRAM, and Micron is "in as good of shape as we've ever been coming out of a negative period," said Steve Appleton, Micron's chairman and CEO.
"All in all we feel pretty good about where we sit," Appleton said.
Appleton said Micron hadn't determined whether supply issues in the aftermath of Japan's massive earthquake and tsunami would help or hurt the company's business. On one hand, Japanese competitors to Micron may have supply and production problems which could benefit Micron, but problems suffered by the company's customers in Japan and elsewhere could hurt demand for Micron products, he said.
Appleton said the semiconductor supply chain would likely absorb the situation in Japan with little problem as long as it doesn't last beyond a couple of months. Companies can adjust manufacturing to run slower cycle times while keeping fabs at full capacity in the event there is a small drop off in demand, he said.
"If the effects are relatively short term, you probably won't see a whole lot of anything in terms of the effects of manufacturing around the world," Appleton said.
Micron executives said the company has minimal exposure to a possible shortage of silicon wafers due to outages at wafer suppliers' production facilities in Japan. Micron uses five different suppliers, and even the wafers Micron buys from one of the larger Japanese suppliers are produced at a U.S. facility, they said.
Micron executives said the company has minimal exposure to a possible shortage of silicon wafers due to outages at wafer suppliers' production facilities in Japan. Micron uses five different suppliers, and even the wafers Micron buys from one of the larger Japanese suppliers are produced at a U.S. facility, they said.
According to market research firm IHS iSuppli, roughly 25 percent of the world's supply of raw silicon wafers are produced by two Japanese plants¡ªone operated by Shin-Etsu Chemical Co. Ltd. and one by MEMC Electronic Materials Inc.¡ªthat have currently suspended manufacturing because of damage and power outages caused by the earthquake. It is not clear when these facilities will be producing wafers again.
By: DocMemory
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