UPDATE 2-Micron posts quarterly loss amid industry glut
(Adds details from conference call, details on CFO search)
SAN FRANCISCO, Dec 20 (Reuters) - Micron Technology Inc (MU.N), the largest U.S. maker of memory chips, reported a quarterly loss on Thursday after a year-ago profit, as an industry-wide glut sent prices below production costs.
Shares fell more than 4 percent on analyst concerns the company's capital spending plans for 2008 were too high, given the oversupply plaguing the memory chip industry.
Micron said it expects to spend between $2.5 billion and $3.0 billion in capital expenditures in fiscal 2008.
"The focus will be more the ASP (average selling price) decline and their ability to reduce costs," said American Technology Research analyst Doug Freedman. "The question high in my mind is how important is their capital spending to lowering costs."
The prices for the main type of memory chip used in value and mainstream personal computers fell 50 percent to $1 in November from August, Jeffries & Co analyst John Lau wrote in a research note to clients on Monday.
Average selling prices tumbled 20 percent for DRAM chips and 30 percent for NAND memory chips in the first quarter from the preceding period, the company said. DRAM chips are the most widely used in PCs. NAND chips are used in cell phones and digital music players such as the iPod.
While some of Micron's South Korean and Taiwanese competitors may have lower costs, across the industry the prices memory chip makers can charge are below production costs.
"By no means would they call the market good," Freedman said, referring to Micron's principal competitors.
Micron said it had a first fiscal-quarter net loss of $262 million, or 34 cents per share, compared with a year-ago net profit of $115 million, or 15 cents per share.
Excluding items, Micron's loss of 24 cents a share missed analysts' average estimate of a loss of 19 cents, according to Reuters Estimates.
Net sales rose to $1.535 billion from $1.53 billion, the Boise, Idaho-based company said. That beat analysts' average estimate of revenue at $1.48 billion.
Micron also recorded a $62 million expense for semiconductor inventory that decreased in value and contributed to its loss. It also took a charge of $13 million for job cuts that it had undertaken in the preceding quarter.
Chief Executive Steve Appleton said on a conference call with analysts that he is the interim chief financial officer, following the previously announced departure of the previous finance chief Bill Stover. Micron is reviewing internal and external candidates and expects to hire a new CFO in the current quarter, Appleton said.
Appleton also said that the majority of his company's capital spending in 2008 will occur toward the beginning of its fiscal year, and be focused largely buying machines that make chips from dinner-plate-sized silicon wafers.
Shares fell 4.4 percent to $7.57 in extended trading after Micron posted its results from their close of $7.92 on the New York Stock Exchange.
Micron shares have fallen about 45 percent so far this year, compared with a 13 percent decline in the Philadelphia Semiconductor Index .SOXX. (Editing by Gary Hill)
