Micron's Temporary Reprieve

A short-lived price spike in a new type of memory likely cushioned Micron's(MU Quote - Cramer on MU - Stock Picks) latest results in an otherwise tough memory market. But even with that help, the company is still expected to post its eighth straight quarter of financial losses when it delivers earnings after the close.

For now, analysts remain split on how much of a boost Micron got from the shortage of so-called DDR memory, which processes data twice as fast as the traditional SDRAM. Both chips provide memory to operate PC programs.

On average, Wall Street watchers expect the company to post revenue gains of 8% in its November quarter to $809 million, with a net per share loss of 23 cents. That would seem to jibe with management's guidance in September for a "typical to maybe slightly muted" outlook for the period.

But a few outlying bulls and bears are far off that mark. On the bearish side, Lehman Brothers' Dan Niles expects paltrier revenues of $735 million -- which would mark a sequential drop of 2% -- and a loss of 31 cents. His firm has done recent banking for Micron.

He points out that cheaper SDRAM continued to account for about half of production in the most recent quarter (though DDR will soon surpass it). Given that SDRAM prices stayed weak until early November, he expects the company will report that its overall average selling prices declined slightly from the prior quarter.

Price slides are hardly unusual for DRAM companies, especially in the current weak market. In the previous August quarter, Micron's average selling prices dove 30%.

Niles also expects bit shipments to drop because of Micron's inventory reductions in the prior quarter.

Taking a far more upbeat view is Merrill Lynch's Joseph Osha, who thinks ASPs actually rose 5% in the quarter based on DDR strength. He predicts Micron will say revenue vaulted 27% sequentially, leading to a loss of only 7 cents a share. Merrill hasn't done recent banking for Micron.

What Goes Up?

Whatever the takeaway on the just-ended November quarter, the outlook for DDR in the quarter now under way isn't promising.

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