Micron Posts Big Loss, Sales Down 79%

Micron Technology , one of the biggest makers of memory chips used in personal computers, Tuesday reported a loss of about $576 million for its fiscal fourth quarter as sales tumbled 79 percent, due to weak PC sales and a glut of memory chips.

For the period ended Aug. 30, Boise, Idaho-based Micron Technology reported a loss of $575.5 million, or 96 cents a share, compared with net income of $726 million, or $1.28 a share, a year ago. Sales tumbled to $480.3 million from $2.31 billion.

The loss in the latest fourth quarter includes a charge, after taxes, of $118 million, or 20 cents a share for the write down of its equity investment in Interland , formerly Micron Electronics Results also include an inventory write down of $289 million, or 48 cents a share, after taxes.

The per-share results excluding the one-time items discussed above would have been a loss of 28 cents, which was narrower than the consensus analysts' forecast for a loss of 33 cents a share, according to Thomson Financial/First Call. Estimates ranged from a loss of 25 cents a share to 45 cents, according to the 13 analysts surveyed by First Call.

The company said in a conference call to discuss the results that prices for all of its memory products declined. Micron Technology is among the largest makers of dynamic random-access memory, or DRAM, chips.

Average selling prices for Micron's memory chips fell 55 percent from the third quarter and about 85 percent from a year ago, accounting for the plunge in revenue.

But Micron, like many other, venerable, U.S. high-tech firms, has a strong balance sheet and can weather the downturn. It ended its fiscal year with some $1.6 billion in cash and short-term investments.

"The global economy is facing stiff challenges from which our industry is certainly not exempt," said Steve Appleton, Micron's chief executive.

Prices for DRAM chips have plunged in the last year. A year ago, DRAM chips with 128 megabits of memory were just under $15 per part and now they are selling for a little less than $2, as supply has outstripped demand and some Asian DRAM makers have elected not to pare back on production.

Shares of Micron Technology closed down $1.06 to $21.24 in New York Stock Exchange trade. Reflecting plunging prices for DRAM, or dynamic random-access memory, chips and weak PC sales, the stock has fallen 40 percent this year, while the Philadelphia Semiconductor Index has declined 30 percent.

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