Micron Results Top Estimates

(RTTNews) - Memory chip maker Micron Technology, Inc. (MU) said Thursday after the markets closed that its fourth quarter profit fell 59% from last year, as sales declined and gross margins deteriorated amid weak demand and pricing pressures due to continued softness in the personal computer market.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations as did its quarterly sales. At the same time, the company gave a weak outlook for the current quarter.

D. Mark Durcan, Micron's Chief Executive Officer, said, "While fourth quarter results were impacted by continued weakness in the PC sector, we believe that memory industry fundamentals remain favorable over the long term."

Micron shares are currently gaining 7.85% in after hours trading after closing the day's regular trading session at $14.77, down 21 cents or 1.40%. The shares trade in a 52-week range of $13.50 to $36.59.

In memory chip market, Micron competes with industry leader Samsung and Hynix Semiconductor among others. Micron has expanded into a new area of the memory market known as NOR with its $1.2 billion acquisition of Numonyx. The July 2013 acquisition of Elpida Memory, Inc. helped increase Micron's global market share for DRAM chips, whcih are most widely used in personal computers. Micron also supplies NAND Flash memory chips, which are used in iPods, digital cameras and other portable devices.

There were reports around mid-July that Tsinghua Unigroup Ltd., China's largest state-owned chip maker, made a $23 billion bid to buy Micron Technology. However, that deal has not yet materialized.

Boise, Idaho-based Micron reported net income for the fourth quarter of $471 million or $0.42 per share, compared to $1.15 billion or $0.96 per for the year-ago quarter.

Excluding items, adjusted net income for the latest quarter was $399 million or $0.37 per share.

On average, 28 analysts polled by Thomson Reuters expected the company to earn $0.33 per share for the fourth quarter. Analysts' estimates typically exclude special items.

This marks the company's tenth straight quarterly profit after a string of seven consecutive quarterly losses.

Gross margin for the fourth quarter shrank 26.9% from 32.8% a year earlier.

Net sales for the fourth quarter fell 15% to $3.60 billion from $4.23 billion in the same quarter last year. Thirty-one analyst had a consensus revenue estimate of $3.56 billion for the fourth quarter.

Looking forward to the first quarter, Micron forecast revenue of $3.35 billion to $3.60 billion and earnings of $0.20 to $0.26 per share. Analysts currently expect the company to earn $0.38 per share on revenue of $3.74 billion for the first quarter.