MU: Micron Misses, and We’re Dying of Not-Surprise
“There’s a big surprise! I think I’m gonna have a heart attack, and die of not-surprise!” - The parrot Iago (voice by Gilbert Gottfried) in Aladdin (Disney Special Platinum Edition)
Micron Technology (MU - Annual Report) took a share of the blame for the dramatic turnaround in stock markets on Friday when the company said it sees falling margins for some memory chips (Yahoo! News):
Micron Technology Inc. on Friday forecast that prices for memory chips used in consumer electronics would tumble 30 percent to 40 percent this quarter from the previous one, sending shares down more than 3 percent.Mike Sadler, the company’s head of sales, said the falling prices come after Micron boosted production of NAND memory chips and amid an industry glut. Micron is the largest U.S. maker of computer memory chips.
He did not detail the potential impact on the company’s earnings and said he did not see any signs of strengthening demand for the chips that store information on devices such as digital cameras and digital music players.
“It just happens that it is not ideal timing with our ramp up of output when the market is depressed,” Sadler said in a telephone interview.
No, boosting production amid an industry glut is not ideal timing. But aren’t Micron’s managers supposed to be able to figure that out? Apparently, though, they weren’t the only ones. The stock dropped about 3% on the announcement and took the rest of the market with it. Which begs the question: wasn’t anyone in the market paying attention to the semiconductor glut? We at Stock Market Beat, with no resources other than a dining room chair to sit in while at the computer, saw it coming months ago.
Disclosure: William Trent has a long position in SMH.
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