Micron Technology, Inc., (MU), Wednesday reported a significant decline in profit for the second quarter, due primarily to lower margins and higher expenses that more than offset a rise in sales. Nevertheless, both earnings and revenues for the quarter came in ahead of analysts estimates.
The Boise, Idaho-based semiconductor company's net income attributable to the company for the second quarter declined to $72 million or $0.07 per share from $365 million or $0.39 per share in the previous year.
On average, 17 analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter rose to $2.26 billion from $1.96 billion a year ago. Analysts estimated revenues of $2.06 billion for the quarter.
Micron Technology makes a number of products including dynamic random access memory (DRAM) products, specialty DRAM memory products, and NAND flash memory products. The products are used in a range of electronic applications, including personal computers, workstations, network servers, mobile phones, flash memory cards, USB storage devices, digital still cameras, MP3/4 players, and in automotive applications.
Revenue from sales of DRAM products for the quarter declined 6 percent sequentially, due to a 23 percent decrease in average selling prices largely offset by an increase in volume.
Revenue from sales of NAND Flash products was 8 percent higher in the second quarter of 2011, compared to the first quarter of fiscal 2011 due to an increase in volume partially offset by a 4 percent decrease in average selling prices.
Revenue from sales of NOR Flash products declined 7 percent from the previous quarter due primarily to a decrease in average selling prices.
The company's consolidated gross margin for the quarter was 19 percent, compared to 33 percent in the same quarter last year. Cost of goods sold soared to $1.82 billion from $1.32 billion last year.
Selling, general and administrative expenses increased to $146 million from $100 million a year ago. Research and development expenses rose to $186 million from $148 million in the previous year.
Income tax provision for the quarter rose to $35 million from $4 million a year ago.
On January 25, research firm Avian downgraded the company stock to 'negative' from 'neutral,' with a mean target of $13.36.
MU closed Wednesday's regular trading at $10.61, up $0.26 or 2.51%, on a volume of 50.17 million shares on the Nasdaq. In after hours, the stock further gained $0.49 or 4.62%, trading at $11.10. In the past 52-week period, the stock trended in a range of $6.36 to $11.95, with a 3-month average volume of 41.18 million shares.
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