Micron Electronics Inc, Nampa, Idaho personal computer vendor, has reported third-quarter net income down 69.8% at $5.9m on revenue down 33.4% at $340.8m. Earnings per share fell 70% to $0.06 for the quarter, when First Call was expecting just $0.04 for the quarter, giving Micron an upside surprise after two consecutive quarters of profit warnings. The company said improved inventory management buoyed gross margins to 19.2% for the quarter, up from 15.6% last year. PC inventories stood at just 10 days by the quarter’s end, numbers that represent 36 turns per year. Higher-than-expected average selling prices for notebooks that were written down in the previous quarter led the way with $48m worth of the products carrying a 34% gross margin and boosting both the overall average and the company’s net income. During the quarter, Micron also saw a cost savings of $4.4m as a result of a change in its provider of on-site service contracts. The revenue decline came as a result of a 15% in overall average selling prices and unit sales that slipped 6%. Sales of SpecTek semiconductor memory products plunged 50% year- over-year as a result of an industry-wide decline in prices. Nine-month net income fell 56% to $31.8m on revenue down 3.3% at $1.39bn. Earnings per share fell 57.1% to $0.33 for the nine months. Nine-month results include a one-time pre-tax gain of $156.2m on the sale of 90% of the company’s contract manufacturing business.
