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Updated from Oct. 5

Micron Tech

(MU) - Get Micron Technology, Inc. Report

shares fell a day after it said it grew its fourth-quarter profit, but the company's finances did not meet Wall Street expectations.

The Boise, Idaho memory chipmaker said late Thursday it earned $63.5 million, or 8 cents a share, on sales of $1.37 billion in the three months ended Aug. 31. At this time last year, Micron earned $43.1 million on sales of $1.25 billion.

Analysts polled by Thomson First Call however were looking for the company to earn 14 cents a share, with $1.41 billion in revenue during the fourth quarter.

In early Friday trading, shares of Micron sank 9.3%, or $1.63, to $15.91, erasing more than six weeks of the stock's gains.

The profit shortfall was surprising given that demand and prices for the DRAM memory chips Micron produces are better than they have been in years.

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The company said it recorded a $45 million charge during the quarter related to various legal settlements, shaving about 3 percentage points of its memory chip sales gross margin.

Without those charges, executives said that Micron's gross margins for memory chips in the fourth quarter would have been up sequentially.

Micron executives also told analysts in a postearnings conference call that the company's flash-memory chip business is still unprofitable. The company inked a joint venture with

Intel

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last year to produce NAND flash chips, which are increasingly being used in consumer electronics devices.

Though executives did not say when Micron expects to turn a profit in flash, they do expect their costs in flash to decline as much as 60% to 80% next year, while their total number of bits produced will jump by 50%.

"Micron effectively executed its diversification strategy, resulting in strong financial performance for the year while strengthening its platform for future success," CEO Steve Appleton said in a statement.

Micron's management mentioned an inventory glut of cell phone memory chips and image sensors during the quarter, but said it appeared that much of that inventory has now been digested by cell phone companies.