Micron Results Trounce Estimates

(RTTNews) - Memory chip maker Micron Technology, Inc. (MU) said Tuesday after the markets closed that it swung to a first quarter profit, as revenue more than doubled and gross margin improved sharply thanks to tits July acquisition of Elpida Memory, Inc.

The company's quarterly earnings per share, excluding items, also handily beat analyst estimates as did its quarterly revenue.

Micron shares are currently gaining 5.71% in after hours trading after closing the day's regular trading session at $21.73, up $1.06 or 5.13%. The shares trade in a 52-week range of $7.06 to $23.67.

The Boise, Idaho-based company reported net income for the first quarter of $358 million or $1.30 per share, compared to a net loss of $275 million or $0.27 per share for the year-ago quarter.

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

Excluding items, adjusted net income for the latest quarter was $881 million or $0.77 per share.

On average, 31 analysts polled by Thomson Reuters expected the company to earn $0.44 per share for the first quarter. Analysts' estimates typically exclude special items.

Gross margin for the quarter improved to 31.7% from 11.8% in the prior year quarter.

Net sales for the first quarter jumped 120% to $4.04 billion from $1.83 billion in the same quarter last year. Thirty analysts had a consensus revenue estimate of $3.73 billion for the first quarter.

The company said first quarter revenues from sales of DRAM products rose 69% from the prior quarter, due mainly to an increase in sales volume resulting from the Elpida acquisition.

First quarter revenues from sales of NAND Flash products grew 8% over the previous quarter, as a 11% increase in sales volume was offset by a slight 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.