Micron Beats by a Nickel

The chipmaker said it earned $192 million, or 25 cents a share, in the three months ended Nov. 30. At this time last year, Micron earned $63 million, or 9 cents a share.

Analysts polled by Thomson First Call were looking for a profit of 20 cents on $1.64 billion in sales.

Micron said it expects $4 billion in capital expenditures in 2007, as it ramps several new chip fabrication facilities slated to produce DRAM and NAND flash memory. Micron, which has a NAND flash manufacturing joint venture with Intel(INTEL), said $1.5 billion of the capital expenditures will come from joint-venture partners.

None of Micron's current output of flash chips is supplying its Lexar subsidiary, which it acquired for $850 million in June.

Executives said the company is working aggressively to strengthen Lexar's retail presence, but noted that the priority would be on operating margins rather than top-line growth, given the current glut of NAND chips in the market and the consequent plunge of average selling prices.

Micron declined to say when it expected its NAND business to break even, but said that it was exceeding its cost-reduction targets.

As usual, Micron did not provide any specific financial guidance for its current quarter, although the company said that selling, general and administrative costs could rise to $250 million this quarter as its ramps production at new fabs.

And management signaled that the company's image-sensor business was entering a challenging period, as customer inventory piled up and seasonal demand for cell phones slows in the coming months.

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