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October 5, 1999

Micron Shares Lifted by Surprisingly Solid Q4

By CBR Staff Writer

Shares in Micron Technology Inc rose $3.25 on Tuesday to $79.625 after the memory chip manufacturer posted a smaller-than-expected fourth-quarter loss and received an upgrade on Wall Street. Micron reported a net loss for the quarter of $17m, or $0.07 per share, when analysts surveyed by First Call were expecting a loss of $0.18.

Revenue for the period jumped 56.2% year-over-year to $1.08bn, helping to offset a 23% decline in average selling prices from the preceding quarter. Micron said it saw an 80% sequential increase in megabit sales of semiconductor memory. Gross margins for the semiconductor operations were 23%, down slightly from the prior quarter, while PC systems margins rose two points to 18%.

After the surprising showing, analyst Dan Niles at BancBoston Robertson Stephens upgraded Micron shares to buy from long- term attractive, citing increased demand from DRAMs after the Taiwan earthquake. Niles also upped his near-term price target on the stock to $100. He noted that, in his opinion, memory per PC is increasing enough to offset flagging unit shipments.

For the full year, Micron reported a net loss of $68.9m on revenue up 24.4% at $3.76bn, compared to a loss of $247.1m last year. Year-ago results include a one-time gain of $157m on the sale of a subsidiary and investments. Megabit sales of semiconductor memory soared 185% for the year.

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