Micron Technology Inc., the largest US memory-chip manufacturer, projected that sales would fail to reach analysts expectations over the second fiscal quarter due to seasonally low demand.
According to the information posted by Micron along with its first-quarter earnings report, sales over the second fiscal quarter ended February are expected to be in the range of $4.1 billion-$4.3 billion, compared to analysts projections for $4.54 billion.
The U.S.-based memory-chip manufacturer also revealed that earnings over the first fiscal quarter that ended December 4th rose, benefited by stronger sales and lower expenses. Net income rose from $358 million, or 30 cents per share, a year earlier to $1 billion, or 84 cents per share. The year-ago period included a $233-million charge, which was associated with a litigation settlement.
Excluding debt-restructuring losses and other one-time items, Q1 earnings increased from 77 cents per share to 97 cents per share. Revenue jumped by 13% to $4.57 billion, which was in line with the companys estimate, but trailed analysts forecasts for $4.61 billion.
The Chief Executive Officer of Micron – Mr. Mark Durcan – shared that production of the companys DRAM (Dynamic Random Access Memory) chips is expected to fall in the second fiscal quarter as a result of re-configuring the product lines with improved technology. He also explained that overall DRAM production is planned to be boosted by the company at a slower rate in 2015 in comparison to rivals.
“This production lull is occurring in a normally seasonally slower demand period” Mr. Durcan said.
At the moment, Micron is known as the only remaining U.S.-based manufacturer of DRAM, which is used in personal computers. The company became the second-biggest DRAM maker in the world after Samsung Electronics Co. thanks to the purchase of Elpida Memory Inc. two years ago.
Micron also manufactures NAND flash memory chips, which are a component used in portable devices such as tablets, smartphones and digital cameras to store photos.
Micron Technology Inc. fell 2.68% on Tuesday on the NASDAQ to close at $32.87 per share, trimming its one-year increase to 59.02%. The company is valued at $36.29 billion. According to CNN Money, the 30 analysts offering 12-month price forecasts for Micron Technology Inc. have a median target of $42.00, with a high estimate of $60.00 and a low estimate of $31.00. The median estimate represents a +27.78% increase from the last price of $32.87.
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