Chip maker Micron Technology Inc. (MU), Thursday reported a loss for the second quarter that widened from a year ago, as margins dropped, partly on currency hedging charges as well as on a loss from the sale of an Italian facility. The quarterly loss, which is the seventh consecutive one, was bigger than what the Wall Street expected.
Quarterly sales meanwhile increased from last year and topped expectations, reflecting demand for its NAND Flash products and DRAM products used in a host of devices. That boosted investor sentiment and shares of the company gained nearly five percent in the immediate after-hours trading, but later pulled back somewhat. The stock is now up 3.20 percent.
Micron, like others in the industry, had seen revenue pressure due to global slowdown in the semiconductor market, especially in 2012. Nevertheless, the situation seem to be improving with the World Semiconductor Trade Statistics predicting the global semiconductor market to grow 4.5 percent in 2013.
Micron said net sales in the second quarter increased to $2.08 billion from $2 billion in the prior year. Analysts polled by Thomson Reuters estimated sales of $1.92 billion for the quarter.
Sales of DRAM products, used widely in personal computers, were up 24 percent sequentially due to a 38 percent increase in volume, partly offset by a 10 percent drop in selling prices. Sales of NAND Flash products were up 8 percent from the prior quarter, on a 13 percent rise in sales volume.
Meanwhile, sales of NOR Flash products were down 14 percent from the previous quarter, due to decreases in volumes and selling prices.
Manufacturing efficiencies helped quarterly gross profit increase to $366 million from $213 million last year, while research, selling and other expenses shaved off most of that.
Micron further incurred losses of $120 million from changes in the market value of currency hedges entered into in connection with its planned acquisition of Elpida Memory Inc. and Rexchip Electronics Corp. Micron also suffered a loss of $62 million associated with the expected sale of its water fabrication facility in Avezzano, Italy.
Overall, the The Boise, Idaho-based company reported quarterly net loss to common shares of $286 million, compared to net loss of $282 million last year.
On a per share basis, quarterly loss narrowed to $0.28 from $0.29 a year ago, reflecting a higher share count. On average, 27 analysts polled by Thomson Reuters expected a loss of $0.19 per share for the quarter.
Micron closed Thursday's regular trade at $9.07, down 2.58%, on a volume of 37.4 million shares. In after hours, the stock gained $0.29 or 3.20%. In the past year, the stock has traded in a range of $5.16 - $9.75.
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