Memory maker Micron back in black
The company returned to profitability in the past quarter, thanks to higher memory prices and a diversifying customer base.
The Boise, Idaho-based memory maker reported revenue of $1.1 billion and net income of $91 million, or 13 cents a share, for the third fiscal quarter, which ended June 3.
Although the revenue figure was slightly lower than analysts' estimates, Micron's net income exceeded the consensus figure of 9 cents a share.
A year ago, Micron reported revenue of about $733 million and a net loss of 36 cents a share. Last quarter, the company saw revenue of $991 million and a net loss of 4 cents a share.
The bump in revenue and return to profitability come as a result of a brighter outlook, at least temporarily, in the notoriously volatile memory market. Memory prices are substantially higher than they were in 2003 because of strong PC sales, and many manufacturers are turning profits now rather than losses.
Micron's average selling prices for memory in the third quarter were approximately 15 percent higher than the immediately preceding quarter and about 45 percent higher than the same period a year ago.
"We think that the second half of the year will remain stable" for pricing, Steve Appleton, Micron's CEO, said in an interview.
The company has also managed to move away from a reliance on the PC market, he added. Historically, 95 percent of Micron's output went into PCs or servers. Now only 65 percent of the chips that leave its factories go to PCs, with the rest going to consumer devices, communications equipment and other products.
PC makers have also begun to sell PCs equipped with DDR 2 memory, which is faster and costs more than DDR, the most common form of memory used in PCs today. It's a marginal part of the mix now, but DDR 2 volumes will grow, Appleton said.
The company, however, admitted that it had to reduce memory production from the previous quarter so that it could continue to diversify into image sensors.