Micron Loses Some Memory

Falling memory prices took a toll on Micron's(MU Quote) bottom line, as the company reported a nearly 60% drop in profit from the year before.

In its financial results for the fiscal first quarter of 2006, Micron reported $1.36 billion in sales, with $63 million in net income, or 9 cents a share.

That compares with sales of $1.26 billion in sales and income $155 million, or 23 cents a share, a year earlier.

Analysts polled by Thomson First Call were expecting 11 cents on $1.35 billion.

Micron CEO Steven Appleton cited in a statement accompanying the results a 15 % decline in the average selling prices of PC DRAM, the company's biggest product. But he said Micron's success in broadening its product portfolio significantly reduced the impact of the price erosion.

The company's gross margin remained stable at 23% thanks to increasing sales of higher-margin products, including CMOS image sensors, specialty DRAM and flash memory.

Shares of Micron were recently down 21 cents, or 1.5% to $13.93 in after-hours trading, after closing the regular session up 43 cents to $14.14.

The company expects to have roughly $1.5 billion in capital expenditures in fiscal 2006, not including $500 million to fund its recently announced flash memory joint venture with Intel(INTC Quote), IM Flash Technologies.

Additionally, Micron announced two new board members: Teruaki Aoki and Robert Switz. Aoki has served as a senior vice president at Sony(SNE Quote).

Switz is president and CEO of ADC Telecommunications(ADCT Quote).