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Micron reports loss but beats forecast

5.3% of stock sold to Intel in strategic move

SHARE Micron reports loss but beats forecast

BOISE — Rising prices and strengthening demand for memory chips combined with continued cost-cutting to limit the loss reported Wednesday by Micron Technology Inc.

The company also announced the sale of 33.9 million shares, or 5.3 percent of its stock, to Intel Corp. for $450 million, a deal that President Steve Appleton said provided a strong corporate relationship on the development and deployment of new products.

Micron, the world's second-largest computer memory chip maker, lost $123.2 million, or 20 cents per share, on sales of $888.5 million in its fiscal fourth quarter, which ended in August.

Although it was the 11th straight quarterly loss for the Boise-based company, it compared to a loss of $467.6 million, or 97 cents a share, on sales of $748 million a year earlier.

The loss per share was a nickel less than expected by Wall Street analysts surveyed by Thomson First Call, and their outlook had already improved significantly from late July.

In the entire fiscal year, the company lost a record $1.27 billion, or $2.11 a share, on sales of nearly $3.1 billion.

That broke a record for losses of $907 million, or $1.51 per share, on sales of $2.6 billion set in 2002.

Michael Sadler, Micron vice president of worldwide sales, cited strengthening "back-to-school computer demand and the early stages of a re-energized commercial computing environment" along with rising demand for consumer electronics and networking equipment for the improving economic picture.

At the same time, the company said it cut costs by 10 percent during the fourth quarter following cost reductions of 20 percent and 10 percent in the third and second quarters, respectively.

"We are pleased with the manufacturing cost reductions achieved over the past three quarters and anticipate comparable reductions over the next couple of quarters," Appleton said.

Analyst Rick Wittington at American Technology Research said that with prices flattening out again in the near term, low costs remain the key to Micron's return to profitability. He speculated that the company could push costs down enough in the coming year that it could be "locking up a succession of quarterly profits."