Plunging market prices prompted Micron Technology Inc. to write down the value of its computer chip inventory this spring, generating the lion's share of a $313.4-million fiscal third-quarter loss.
Semiconductor sales were barely half what they were a year ago, the Boise-based company reported Thursday. The quarter's loss of 53 cents a share compares with a year-earlier profit of $274.8 million, or 50 cents a share.
Still, Micron executives said the company will have spent $1.8 billion on leading-edge manufacturing and processing capabilities by the end of its fourth quarter Aug. 30.
The red ink for the third quarter included a one-time loss of $12.3 million, or 3 cents a share, from disposing of the company's personal computer business. Micron wrote off $84 million in the second quarter in connection with the personal computer operation, which has been sold to Gores Technology Group.
But the $301.1-million loss on Micron's continuing operations, the equivalent of 50 cents a share, was more than three times what Wall Street analysts were expecting. They had retrenched significantly in the last six weeks from expecting a break-even quarter to bracing for a 15-cent-a-share loss.
Feeding that red ink for the three months through May was the $260-million write-down May 31 of the company's chip inventory to reflect plunging market values amid a global chip glut.
During the third quarter, net semiconductor sales of $818 million were down 24% from the previous quarter and nearly 48% from a year earlier. The average chip sales price fell 35% during the quarter, and that was only partially offset by a 20% increase in megabit shipments, the company said.
Nine-month sales were $3.4 billion, down from just over $4 billion a year earlier. The third-quarter loss ate up the profit made in the first half of the year to leave Micron with a net loss of $49.5 million, or 8 cents a share, for the nine months compared with a profit of $777.5 million, or $1.45 a share, a year earlier.
Micron's stock closed up 87 cents to $37.71 on the New York Stock Exchange in regular trading Thursday, but it was headed lower in after-hours trading after the earnings report was released.
The stock is up 6% year to date.