Micron Posts 2nd Consecutive Quarterly Profit

(RTTNews) - Memory chip maker Micron Technology, Inc. (MU) said Thursday after the markets closed that it swung to a fourth quarter profit, helped by higher sales and improved gross margin as well as hefty purchase accounting gains relating to the acquisition of Japan's Elpida Memory, Inc.

However, the company's quarterly earnings per share, excluding items, came in below analysts' expectations, but its quarterly sales beat analysts' forecast.

Micron shares are currently gaining 0.43% in after hours trading after closing the day's regular trading session at $18.43, up 28 cents or 1.54%. The shares trade in a 52-week range of $5.16 to $18.85.

The Boise, Idaho-based company reported net income for the fourth quarter of $1.71 billion or $1.51 per share, compared to a net loss of $243.0 million or $0.24 per share for the year-ago quarter.

This marks the company's second straight quarterly profit after a string of seven consecutive quarterly losses.

Micron completed its acquisition of Elpida Memory, Inc. and Rexchip Electronics Corp. on July 31. The latest quarter results include $1.484 billion, or $1.31 per share, in purchase accounting gains relating to the acquisition and the results of operations of Elpida for the month of August. The latest quarter results also include $32 million in restructuring and impairment costs.

On average, 25 analysts polled by Thomson Reuters expected the company to earn $0.25 per share for the fourth quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter improved to 25.0% from 11.2% in the prior year quarter.

Net sales for the fourth quarter rose 45% to $2.84 billion from $1.96 billion in the same quarter last year. Twenty-six analysts had a consensus revenue estimate of $2.71 billion for the fourth quarter.

The company said fourth quarter revenues from sales of DRAM products rose 50% from the prior quarter due to a 42% increase in sales volume and a 5% increase in average selling prices.

Fourth quarter revenues from sales of NAND Flash products grew 5% over the previous quarter, as a 17% increase in sales volume was offset by an 11% decrease in average selling prices.

DRAM chips are most widely used in personal computers, while NAND Flash memory chips are used in iPods, digital cameras and other portable devices.

In memory chip market, Micron competes with industry leader Samsung and Hynix Semiconductor among others. Micron has expanded into a new area of the memory market known as NOR with its $1.2 billion acquisition of Numonyx. The latest acquisition of Elpida would increase Micron's global market share for DRAM chips.