January 6, 2015 / 10:14 PM / 3 years ago

Micron revenue outlook misses Street, stock drops

SAN FRANCISCO (Reuters) - Memory chipmaker Micron Technology gave a quarterly revenue forecast on Tuesday that missed Wall Street’s expectations, hurt by an output drop as it upgrades DRAM production lines, and its shares fell.

Micron, which makes DRAM and NAND chips for personal computers, smartphones, servers and other devices, said in a statement that its revenue rose 13 percent to $4.57 billion in its first quarter, which ended on Dec 4.

But for its upcoming second quarter, Micron said it expects revenue of between $4.1 billion and $4.3 billion.

Analysts on average had expected revenue of $4.614 billion for the first quarter and $4.528 billion for the second quarter, according to Thomson Reuters I/B/E/S.

Micron expects production of its DRAM chips to be down in the second quarter as it reconfigures production lines with improved technology, Chief Executive Mark Durcan told analysts on a conference call.

“This production lull is occurring in a normally seasonally slower demand period,” he said, adding that Micron would increase its overall DRAM production at a slower rate than its competitors this year.

Demand for DRAM chips for personal computers remained strong in the first quarter, Micron said.

Micron’s stock surged 61 percent last year, helped by optimism for strong and stable prices for memory chips.

Investors have also applauded Micron’s acquisition of Japanese DRAM maker Elpida Memory, which the U.S. chipmaker bought in July 2013 in a bid to improve economies of scale.

Micron posted a first-quarter net profit of $1 billion, or 84 cents per share, compared with a net profit of $358 million, or 30 cents per share, in the same quarter a year earlier.

Excluding items, Micron earned 97 cents per share in the quarter. Analysts on average expected 92 cents per share.

Shares of Micron were down 2.5 percent in extended trade after closing down 2.68 percent at $32.87 on Nasdaq.

Reporting by Noel Randewich; Editing by Diane Craft, Meredith Mazzilli and Peter Galloway

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