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As it warned it would all the way back in September (CI No 3,253), PC manufacturer Micron Electronics Inc has reported disappointing first-quarter results. Net income stood at just $1.1m, and earnings per share fell to $0.01 from $0.27 – when Wall Street was looking for $0.06. The quarter was hit hard by pricing pressures in the PC market. Net sales of PCs rose 36% for the quarter, but average selling prices fell 10% and 30% for desktops and notebooks, respectively – leading PC systems margins down to 12.8% from 19.7%. Selling, general and administrative expenses rose 86% to $74.1m as a result of the company’s increased advertising activities (CI No 3,243), as well as a recently-opened call center operation in Japan and the addition of the NetFrame business (CI No 3,179), an acquisition that closed in the fourth quarter. Micron has previously stated that it expects NetFrame to be accretive to both the top and bottom line beginning with the new calendar year, after posting two straight quarterly operating losses.

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CBR Staff Writer

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