Micron Technology

(MU) - Get Report

, a developer of semiconductor memory technologies, reported late Tuesday that its earnings rose more than sevenfold in its second fiscal quarter, but Wall Street was stunned that profits were not considerably higher.

Indeed, two investment firms in the last two days had issued favorable reports about the company's prospects ahead of the earnings report.

Investors were in no mood for surprises. Shares of Micron Technology plunged 11 1/2, or 9%, to 119 in after-hours trading, according to

Instinet

. Micron reported its earnings after the New York Stock Exchange closed, and its stock had ended regular trading down 3 1/8, or 2.3%, at 130 1/2.

Micron, which is based in Boise, Idaho, attributed the earnings shortfall to a 20% drop in the price of its semiconductor memory products.

"Average selling prices for the company's semiconductor memory products declined in the second fiscal quarter by 20% as compared to the first fiscal quarter of 2000," Micron Technology said in a statement. "This decline followed strong pricing in the first fiscal quarter, once again demonstrating the volatile nature of semiconductor memory pricing."

For the fiscal quarter ended March 2, the company reported net income of $161.3 million, or 58 cents a diluted share, compared with net income of $22.4 million, or 8 cents a share, in the 1999 second quarter.

Wall Street had expected earnings of 74 cents a share in the latest quarter, according to a survey of 22 analysts conducted by

First Call/Thomson Financial

.

Sales rose 36%, to $1.39 billion, from $1.03 billion a year earlier.

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Earlier Tuesday,

Donaldson Lufkin & Jenrette

began coverage of Micron Technology with a buy rating, one day after

Bear Stearns

raised its rating to a buy from a neutral.

Charles Boucher, an analyst at Bear Stearns, indicated that he expected lower prices for semiconductor memory products to weigh on second-quarter earnings, but nevertheless said he was bullish on the stock because of expectations for strong revenue and earnings growth later in the year.

"Although recent price declines should negatively affect earnings in the current quarter, we expect prices to turn around earlier than the last few years due to very tight capacity utilization," Boucher wrote in a report. "We consequently believe that Micron could generate enormous revenue and earnings growth later in 2000 and in 2001."

Boucher raised his 12-month price target to 225.

Boris Petersik, an analyst at Donaldson Lufkin & Jenrette, missed the mark on the second quarter, saying that he expected revenues of $1.59 billion and earnings of 80 cents a share.

He issued a price target of $205 based on a multiple of five times annualized first-quarter 2001 revenue.

Petersik said he expected a slow third quarter but a "banner" fourth quarter, forecasting revenues of $2.16 billion and earnings of $1.38 a share.

Neither Boucher nor Petersik could immediately be reached for comment Tuesday evening.

On Monday, Micron Technology's subsidiary,

Micron Electronics

(MUEI)

, reported a 37% increase in its second-quarter earnings, beating Wall Street's expectations by 2 cents a share.