Micron Technology, the largest U.S. maker of computer memory chips, said first-quarter profit fell 60 percent on lower prices for its main...
Micron Technology, the largest U.S. maker of computer memory chips, said first-quarter profit fell 60 percent on lower prices for its main product.
Net income fell to $62.6 million, or 9 cents a share, from $154.9 million, or 23 cents, a year earlier, the Boise, Idaho-based company said Wednesday in a regulatory filing. Sales increased 8.1 percent to $1.36 billion in the period ended Dec. 1.
The drop in profit reflects the difficulties chip makers have in matching supply against demand and maintaining prices in the $26.5 billion market for the chips that provide the main memory for personal computers. Micron Chief Executive Officer Steve Appleton has taken the company into the market for camera sensors and other kinds of memory used in phones and digital music players, lessening his company’s exposure to PC memory chips.
“Memory is always going to be a difficult business to make money in,” said Paul Leming, an analyst at Soleil Securities in Princeton, N.J. He has a “hold” rating on the stock and doesn’t own it.
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Without the move into other products, Micron would have had a loss, Appleton said Wednesday in an interview.
Micron shares fell 57 cents to $13.57 in extended trading after the announcement. They gained 43 cents to $14.14 in the regular trading session. They have advanced 14 percent this year.
Appleton said profit margins are higher in the company’s newer products. “The fact that our profits were a little bit up from the previous quarter in an environment where personal computer memory prices were down 15 percent says a lot,” he said.