* Third-quarter earnings $0.04/share vs est $0.02
* Revenue $2.32 bln vs est $2.25 bln
* Average selling prices of DRAM chips rise 16 pct
By Sruthi Ramakrishnan
June 19 Micron Inc reported a
better-than-expected quarterly profit as prices for its memory
chips rose, and said it was "optimistic" that its acquisition of
bankrupt Japanese chipmaker Elpida Memory Inc would
close in the current quarter.
Micron would defer some capital spending in the first half
of its fiscal year ending August 2014 following the completion
of the deal, Chief Financial Officer Ronald Foster said on a
conference call with analysts.
"We expect to pick up this spending in 2014 as we integrate
the two companies," he said.
The company previously expected the deal to close in the
first half of this year.
Micron's acquisition of Elpida, proposed in July last year,
moved closer to completion after a key deadline for U.S.
creditors to raise objections passed without a legal challenge
earlier this month.
Acquisition of Elpida, the last of Japan's dynamic random
access memory (DRAM) chipmakers, will create economies of scale
and the combined company will rank second only to Samsung
Electronics in the memory chip market.
HIGHER DRAM PRICING
Micron said average selling prices of its DRAM chips is
estimated to rise in the mid to high single digits in the
current quarter. They rose 16 percent in the third quarter.
"The DRAM supply and demand balance remains favorable ... we
believe the situation will remain for the second half of
calendar year 2013," Chief Executive Mark Durcan said on the
DRAM chips, mostly used in PCs, accounted for 39 percent of
the company's revenue last year.
Memory chip supply constraints have driven up prices this
year, with DRAM prices more than doubling, Jefferies & Co
analysts said in a pre-earnings note.
Chip suppliers are converting capacity to supply DRAM for
mobile handsets as demand for such chips from PC makers is
declining, Pacific Crest Securities analyst Monika Garg said.
Analysts said Micron is also likely to benefit from
increased focus on lower cost notebooks by Intel Corp,
Microsoft Inc and PC manufacturers.
Micron reported a net profit - its first in eight quarters -
of $43 million, or 4 cents per share, in the third quarter,
compared with a loss of $320 million, or 32 cents per share, a
Revenue rose 7 percent to $2.32 billion.
Analysts on average had expected a profit of 2 cents per
share on revenue of $2.25 billion, according to Thomson Reuters
Micron's shares closed at $13.97 on the Nasdaq on Wednesday.
They have more than doubled in value over the last six months.