Thursday, December 25th 2008

Micron Ends Year Badly, Reports $706 Million Loss

Micron Technology today announced results of operations for the company’s first quarter of fiscal 2009, which ended December 4, 2008. For the first quarter of fiscal 2009, the company posted a net loss of $706 million, or $0.91 per diluted share, on net sales of $1.4 billion. These results reflect a non-cash charge to cost of goods sold of $369 million to write down the value of work in process and finished goods inventories of memory products to their estimated market values and a benefit of $157 million from first quarter sales of products that were subject to
previous write-downs. In the first quarter of fiscal 2009, the company generated $359 million in cash flow from operating activities and ended the quarter with cash and investments of $1.0 billion.

Sales of the company’s memory products in the first quarter of fiscal 2009 decreased 4 percent compared to the preceding quarter as a result of significant decreases in market selling prices for the company’s products, partially offset by a higher sales volume. The company’s sales measured in gigabits increased 35 percent and 40 percent for DRAM and NAND Flash products, respectively. The sales volume, which outpaced production during the first quarter, resulted in a 15 percent decrease in gigabits of the company’s finished goods inventories during the quarter. Average selling prices for the company’s memory products decreased 34 percent and 24 percent for DRAM and NAND Flash products, respectively.

The company’s reported gross margin decreased in the first quarter compared to the preceding quarter as decreases in per gigabit average selling prices for memory products outpaced decreases in cost. Comparing the first quarter to the fourth quarter of fiscal 2008, absent the effects of the first quarter and prior period inventory write-downs, per gigabit costs decreased 12 percent and 14 percent for DRAM and NAND Flash products, respectively.
The company’s cost-cutting and restructuring activities have yielded reductions in operating costs in nearly all areas and contributed to the company’s cash flow from operating activities in the first quarter.

Sales of CMOS image sensors in the first quarter of fiscal 2009 were relatively stable compared to the preceding quarter. The company’s gross margin on sales of Imaging products also remained stable compared to the fourth quarter, reflecting a slight decrease in costs per part.

The company will host a conference call today at 2:30 p.m. MST to discuss its financial results. The call, audio and slides will be available online at micron.com. A webcast replay will be available on the company’s web site until Dec. 23, 2009. A taped audio replay of the conference call will also be available at (706) 645-9291 (conference number: 76127953) beginning at 5:30 p.m. MST today and continuing until 5:30 p.m. MST on Dec. 30, 2008.Source: Micron
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19 Comments on Micron Ends Year Badly, Reports $706 Million Loss

#2
Steevo
I wonder what the payout for the top three people are per year......
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#3
KBD
damn, i hope they dont go out of business. otherwise no more of those sweet micron chips.
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#5
Weer
by: pr0n Inspector
It's Badly, not Bad.:shadedshu
Well, what do you expect? If you have such high standards, read something professional.
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#6
FreedomEclipse
~Technological Technocrat~
by: Steevo
I wonder what the payout for the top three people are per year......
I wonder how much THEY spent on this years Christmas party, they might of hired Chris Rock or George Clooney to make a guest appearence for 5mins
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#7
Steevo
by: FreedomEclipse
I wonder how much THEY spent on this years Christmas party, they might of hired Chris Rock or George Clooney to make a guest appearence for 5mins
Eactly, anytime a large company claims they have lost money, they are either paying too much to the top dogs, or they are wasting it on needles crap.
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#8
FreedomEclipse
~Technological Technocrat~
But on a serious note -

RAM prices have been/are pretty low compared to the prices 2years ago. but its stupid - Competition drove RAM prices down - then it comes to a point where both/all parties are 'selling-at-a-loss' hoping to win the minds of the mass of consumers who will buy so much of their product that it will negitate the loss & bloom into a small/medium margin of profit. the fact that it probably costs them very little to produce a few sticks of RAM doesnt mean anything - Then they whine & bitch about how low prices are or how their not making enough profit because THEY drove the market down to a new 'low' which then became the benchmark for other manufacturers, old & new that wanted to take advantage of that part of the market.
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#9
kid41212003
It's not that. It's because low demand, over-supply memory chip.

http://www.marketwatch.com/news/story/memory-chip-makers-still-hurting/story.aspx?guid={CB26B86F-0B5F-4503-A1EA-4575C5CEA71D}
http://www.computing.co.uk/computing/news/2217606/dram-sales-slowing
http://www.electronicsweekly.com/Articles/2008/10/03/44638/analysis-memory-madness-all-over-again.htm
http://www.mapmodel.com/index.php/2008/05/05/smic-realigns-their-memory-production/
http://www.channeltimes.com/India/News/Memory_Prices_Hit_the_Lowest_Price_Mark/551-94438-1098.html


Micro and alot more company already reported lost in the past years, not just this year.
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#10
WarEagleAU
Bird of Prey
Wow. They cant charge too much for the chips however I hope things will turn around.
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#11
Bundy
by: Steevo
Eactly, anytime a large company claims they have lost money, they are either paying too much to the top dogs, or they are wasting it on needles crap.
Of course, your detailed critique of their business structure, along with some good old left wing ideologies, describes the exact reason for their problems.:rolleyes:
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#12
TheGuruStud
by: bundyrum&coke
Of course, your detailed critique of their business structure, along with some good old left wing ideologies, describes the exact reason for their problems.:rolleyes:
Not many companies are an exception to his claim. Tech market is a little different, but if you're talking most other things, he's dead on (which is why there's money coming out of everyone's pockets for fat ass automakers).
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#13
FreedomEclipse
~Technological Technocrat~
by: TheGuruStud
Not many companies are an exception to his claim. Tech market is a little different, but if you're talking most other things, he's dead on (which is why there's money coming out of everyone's pockets for fat ass automakers).
::Offtopic::

so you'd rather General Motors - a peice of history thats existed since 1900's to be left to rot???
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#14
WhiteLotus
by: FreedomEclipse
::Offtopic::

so you'd rather General Motors - a peice of history thats existed since 1900's to be left to rot???
Yes.

When a company fails it should fail. All companies exist to make a profit - when they are no longer making a profit they should not exist.


On topic - i wonder if this is a "real" loss - you know accounting for the money that is isn't otherwise accounted for when you pump it into R&D
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#15
Steevo
A large write off of chips they are still selling currently can show a loss.

IE: They have 100 million of inventory left of SDR 133 left on the shelves, they write it off, but still have intention to sell it, they will take the tax liability hit later when they sell it.

Or due to new investments in facilities they took a hit this year instead of spreading it out over a few years, perhaps to beg a billion off the goverment in loans. What they don't tlak about is actual operating capital and working status. We play the same game, we had in November 657K of inventory and turn of 1.5, however the snapshot we used was artificially inflated, so I could say we are at a horrible point, and as of december 5th we had not made money for the month, we were almost 6,000 in the hole.




One snapshot of a business is a horrible way to show health and durability. They are most likely still paying throught the nose to the big wigs and just used this as a way to show the goverment how bad they are doing before they collect end of year payments from other companies.
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#16
zithe
by: malware

Sales of CMOS image sensors in the first quarter of fiscal 2009 were relatively stable compared to the preceding quarter.
z0mg! Quarter 1 of 2009 has already happened? I'm really getting behind..
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#17
Steevo
by: zithe
z0mg! Quarter 1 of 2009 has already happened? I'm really getting behind..
Fiscal year is set by the company, ours ends Jan 31st. They do this to skewer the results, such as they did.
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#18
EaGle1337
ouch i mean the ballistix are junk but wow that is one huge loss.
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#19
DaMulta
My stars went supernova
O no they took a penny out of Bill's bank account:(
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