Micron Technology Inc reported a net loss for its fiscal third quarter of $27.7m yesterday, or $0.10 per diluted share, compared with the break-even that analysts had been expecting. It blamed declining gross margins from the previous quarter due to price declines. Last year the company lost $109.4m in its third quarter. Revenue was up 41% to $863.8m, from $612.7m last year.
Last quarter, Micron returned to profit for the first time in over a year, after some recovery in DRAM pricing. But this quarter, it saw a 27% decline in pricing on 64-megabit synchronous DRAMs, only partially offset by per megabit cost reductions it achieved through manufacturing efficiencies. Compared with last year’s quarter, Micron saw megabits of production increase by 17%, and megabits sold increase by 5%.
While the average price of PC systems decreased slightly during the quarter compared with the second quarter, gross margins improved due to cost cutting. Unit sales were down 13% from the second quarter due to weakness in the consumer sector. Sales to the commercial and government sectors were up slightly.
Micron says it will discontinue the funding of its radio frequency identification developments, and says that its majority owned RFID subsidiary, Micron Communications Inc, will cease operations in the fourth quarter, resulting in a pre-tax charge of between $9m and $12m.
